CLF Q2 Earnings and Sales Beat Estimates on Higher Steel Pricing

Consolidated cost of goods sold declined to $5.1 billion from $5.15 billion a year earlier. Selling, general and administrative expenses rose to $154 million from $137 million, while restructuring and other charges decreased to $3 million from $86 million.

CLF's Operational Highlights

Steelmaking revenues increased 5.9% year over year to $5.05 million from $4.8 billion. The segment generated a cash margin of $349 million, up sharply from $138 million in the year-ago quarter, reflecting stronger selling prices and improved cost performance.

The average net selling price per net ton of steel products was $1,124, up 10.7% from $1,015 a year earlier. The metric was above the consensus estimate of $1,109. 

External sales volumes for steel products totaled 4.025 million net tons, down 6.2% from 4.290 million net tons in the prior-year quarter. The figure missed the consensus estimate of 4.11 million net tons.

Financial Position of CLF

Cleveland-Cliffs ended the second quarter with cash and cash equivalents of $70 million, up from $57 million at the end of 2025. Long-term debt stood at $7.7 billion compared with $7.3 billion as of Dec. 31, 2025. The company had total liquidity of $3.1 billion as of June 30, 2026.

CLF's Outlook

Cleveland-Cliffs expects third-quarter 2026 adjusted EBITDA of approximately $575 million, more than double the second-quarter result. Management also expects fourth-quarter EBITDA to exceed its third-quarter guidance as average selling prices, shipment volumes and costs continue to move in a favorable direction.

CLF maintained its full-year 2026 steel shipment guidance of approximately 16.5-17 million net tons. The company continues to project capital expenditures of about $700 million, SG&A expenses of approximately $575 million and depreciation, depletion and amortization of roughly $1.1 billion.

Cash pension and other post-employment benefit payments and contributions remain projected at approximately $125 million. Management expects second-half earnings performance to be the company’s strongest since 2021 and believes it can reach its leverage target of less than 2.5 times debt to EBITDA by this time next year.

CLF’s Stock Price Performance

CLF’s shares have lost 4.2% in the past year against the industry’s rise of 60.9%.

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CLF’s Zacks Rank & Other Key Picks

CLF currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Carpenter Technology Corporation CRS, Kronos Worldwide, Inc. KRO and Avient Corporation AVNT.

Carpenter Technology is slated to report fourth-quarter fiscal 2026 results on July 30. The Zacks Consensus Estimate for earnings is pegged at $10.58 per share, indicating 41.44% year-over-year growth. CRS sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Kronos is scheduled to report second-quarter 2026 results on Aug. 5. The Zacks Consensus Estimate for KRO’s second-quarter loss per share is pegged at 33 cents, indicating 65.63% year-over-year growth. KRO flaunts a Zacks Rank #1 at present.

Avient is slated to report second-quarter 2026 results on Aug. 6. The consensus estimate for AVNT’s earnings per share is pegged at $3.08. AVNT presently carries a Zacks Rank #2.

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This article originally published on Zacks Investment Research (zacks.com).

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