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Cleveland-Cliffs' (CLF) Q1 Earnings Beat, Sales Miss Estimates

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Cleveland-Cliffs Inc. (CLF - Free Report) reported a net loss of $48.6 million or 18 cents in first-quarter 2020, wider than a loss of $22.1 million or 8 cents in the prior-year quarter.

Barring one-time items, adjusted earnings came in at 4 cents per share, which beat the Zacks Consensus Estimate of a loss of 18 cents.

Revenues surged 128.7% year over year to $359.1 million. However, the figure trailed the Zacks Consensus Estimate of $367.8 million.

ClevelandCliffs Inc Price, Consensus and EPS Surprise


ClevelandCliffs Inc Price, Consensus and EPS Surprise

ClevelandCliffs Inc price-consensus-eps-surprise-chart | ClevelandCliffs Inc Quote


Operational Highlights

Mining and pelletizing pellet production and sales volume were 4.8 million long tons and 2.1 million long tons in the first quarter, up 9.8% and 37.7% year over year, respectively. The increase in sales volumes was due to higher intercompany sales.  

Realized revenues per long ton rose 6.1% year over year to $99.53.  

Cash cost of goods sold rate per long ton fell 0.4% year over year to $61.67.

Financial Position

As of Mar 31, 2020, Cleveland-Cliffs had cash and cash equivalents of $186.9 million, down from $430.2 million as of Mar 31, 2019. Long-term debt was $4,357.1 million at the end of the first quarter, up 108.8% year over year.

Net cash used in operating activities was $160.5 million in the first quarter, up 44.3% year over year.


Cleveland-Cliffs stated that if the automotive manufacturers continue to restart production as they have indicated to the company, its operations will normalize throughout the rest of the second quarter.

Management plans to restart HBI construction as quickly as possible. The company noted that the coronavirus pandemic and related production stoppages have created a significant scarcity of scrap in the marketplace. This has further increased demand and value of its HBI.

Price Performance

Cleveland-Cliffs’ shares have lost 52.3% in the past year compared with the industry’s 6.8% decline.

Zacks Rank & Key Picks

Cleveland-Cliffs currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Agnico Eagle Mines Limited (AEM - Free Report) , Newmont Corporation (NEM - Free Report) and Barrick Gold Corporation (GOLD - Free Report) , all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Agnico Eagle has an expected earnings growth rate of 74.2% for 2020. The company’s shares have surged 55.4% in the past year.

Newmont has an expected earnings growth rate of 96.2% for 2020. Its shares have returned 103.7% in the past year.    

Barrick has an expected earnings growth rate of 70.6% for 2020. The company’s shares have surged 111.4% in the past year.

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