Cleveland-Cliffs beats Q3 estimates and lifts 2027 profit outlook

Cleveland-Cliffs reported third-quarter earnings of $0.28 a share, $0.09 above estimates. Revenue came in at $5.61 billion, below the $5.78 billion expected.

Chairman and CEO Lourenco Goncalves said average selling price, sales volumes and unit costs all improved from the second quarter, pushing adjusted EBITDA above the company's prior guidance of $575 million.

The company expects fourth-quarter adjusted EBITDA of about $715 million, up from the third quarter as higher pricing offsets seasonal effects, more maintenance outages, higher input costs and incentive compensation accruals. For 2027, Cleveland-Cliffs expects adjusted EBITDA to exceed $4 billion, based on new contracts and current price forecasts, a sharp rise from the $575 million benchmark it had set for the prior quarter and a sign that pricing and cost trends are improving faster than the market had expected for steel producers.

Cleveland-Cliffs is indefinitely idling the galvanizing lines at its Stelco operation in Canada, citing an oversupplied galvanized steel market. The company said it will maintain total production tonnage and preserve about 2,000 Canadian jobs, trimming capacity in its weakest segment rather than cutting output across the board, a different approach than the production cuts seen elsewhere in the sector.

The company also reaffirmed its target of reducing net debt to under 2.5 times EBITDA by the middle of 2027, a goal it said depends on stronger free cash flow and on property sale proceeds expected in the fourth quarter.