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Cleveland-Cliffs' (CLF) Earnings & Sales Miss Estimates in Q4
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Cleveland-Cliffs Inc. (CLF - Free Report) logged profits of $899 million or $1.69 per share in the fourth quarter of 2021, up from $74 million or 14 cents in the prior-year quarter.
Barring one-time items, earnings came in at $1.78 per share for the reported quarter, missing the Zacks Consensus Estimate of $2.03.
Revenues were $5,346 million in the reported quarter, up more than two-fold year over year. The top line, however, missed the Zacks Consensus Estimate of $5,625 million. Sales were driven by higher year-over-year sales volumes and prices.
ClevelandCliffs Inc. Price, Consensus and EPS Surprise
The company reported Steelmaking revenues of $5.2 billion in the fourth quarter, up more than two-fold year over year. The average net selling price per net ton of steel products was $1,423 in the quarter, up roughly 62% year over year. External sales volumes for steel products were 3.4 million net tons, a roughly 82% year-over-year increase.
The company, however, saw sequentially lower shipments in the fourth quarter as automotive production remained light during the quarter due to supply-chain issues. Amid this softness in automotive and weaker demand from service centers, the company decided to move up several maintenance outages into the fourth quarter that were originally planned for 2022, leading to sequentially lower steel production in the quarter.
FY21 Results
Earnings for full-year 2021 were $5.36 per share against a loss of 32 cents per share a year ago. Revenues climbed roughly four-fold year-over-year to a record $20.4 billion for the full year.
Financial Position
Cleveland-Cliffs ended 2021 with cash and cash equivalents of $48 million, down around 57% year over year. Long-term debt was $5,238 million at the end of the year, down around 3% year over year.
Net cash provided by operating activities was $1,137 million in the fourth quarter.
Cleveland-Cliffs used $761 million from cash generated during the fourth quarter toward the acquisition of Ferrous Processing and Trading Company ("FPT"). It completed the FPT acquisition on Nov 18, 2021. It also utilized the balance of the cash generated in the quarter to pay down around $150 million in principal debt.
The company’s board also authorized a new share repurchase program, under which, it will have adequate flexibility to purchase shares worth up to $1 billion through acquisitions in the open market or privately negotiated transactions.
Outlook
Moving ahead, Cleveland-Cliffs expects 2022 to be another strong year for profitability based on a rebound in demand, especially in automotive. It is now selling the vast majority of its fixed-price contractual volumes at significantly higher selling prices based on its recently renewed contracts, the company noted.
The company envisions higher year-over-year average steel selling prices in 2022. Cleveland-Cliffs expects its average selling price for 2022 to be roughly $1,225 per net ton factoring in the successful renewal of relevant fixed price sales contracts. This compares to average selling price of $1,187 per net ton in 2021.
Price Performance
Cleveland-Cliffs’ shares have gained 14% in the past year compared with 2.3% decline of the industry.
Image Source: Zacks Investment Research
Zacks Rank & Other Stocks to Consider
Cleveland-Cliffs carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Commercial Metals Company (CMC - Free Report) , Albemarle Corporation (ALB - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Commercial Metals, sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 62% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 22.7% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.1%, on average. CMC has rallied around 61% in a year.
Albemarle, carrying a Zacks Rank #1, has an expected earnings growth rate of 56.2% for the current year. ALB's consensus estimate for the current year has been revised 8.9% upward over the past 60 days.
Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB shares have gained around 40% in a year.
AdvanSix, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 3.2% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 67% in a year.
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Cleveland-Cliffs' (CLF) Earnings & Sales Miss Estimates in Q4
Cleveland-Cliffs Inc. (CLF - Free Report) logged profits of $899 million or $1.69 per share in the fourth quarter of 2021, up from $74 million or 14 cents in the prior-year quarter.
Barring one-time items, earnings came in at $1.78 per share for the reported quarter, missing the Zacks Consensus Estimate of $2.03.
Revenues were $5,346 million in the reported quarter, up more than two-fold year over year. The top line, however, missed the Zacks Consensus Estimate of $5,625 million. Sales were driven by higher year-over-year sales volumes and prices.
ClevelandCliffs Inc. Price, Consensus and EPS Surprise
ClevelandCliffs Inc. price-consensus-eps-surprise-chart | ClevelandCliffs Inc. Quote
Operational Highlights
The company reported Steelmaking revenues of $5.2 billion in the fourth quarter, up more than two-fold year over year. The average net selling price per net ton of steel products was $1,423 in the quarter, up roughly 62% year over year. External sales volumes for steel products were 3.4 million net tons, a roughly 82% year-over-year increase.
The company, however, saw sequentially lower shipments in the fourth quarter as automotive production remained light during the quarter due to supply-chain issues. Amid this softness in automotive and weaker demand from service centers, the company decided to move up several maintenance outages into the fourth quarter that were originally planned for 2022, leading to sequentially lower steel production in the quarter.
FY21 Results
Earnings for full-year 2021 were $5.36 per share against a loss of 32 cents per share a year ago. Revenues climbed roughly four-fold year-over-year to a record $20.4 billion for the full year.
Financial Position
Cleveland-Cliffs ended 2021 with cash and cash equivalents of $48 million, down around 57% year over year. Long-term debt was $5,238 million at the end of the year, down around 3% year over year.
Net cash provided by operating activities was $1,137 million in the fourth quarter.
Cleveland-Cliffs used $761 million from cash generated during the fourth quarter toward the acquisition of Ferrous Processing and Trading Company ("FPT"). It completed the FPT acquisition on Nov 18, 2021. It also utilized the balance of the cash generated in the quarter to pay down around $150 million in principal debt.
The company’s board also authorized a new share repurchase program, under which, it will have adequate flexibility to purchase shares worth up to $1 billion through acquisitions in the open market or privately negotiated transactions.
Outlook
Moving ahead, Cleveland-Cliffs expects 2022 to be another strong year for profitability based on a rebound in demand, especially in automotive. It is now selling the vast majority of its fixed-price contractual volumes at significantly higher selling prices based on its recently renewed contracts, the company noted.
The company envisions higher year-over-year average steel selling prices in 2022. Cleveland-Cliffs expects its average selling price for 2022 to be roughly $1,225 per net ton factoring in the successful renewal of relevant fixed price sales contracts. This compares to average selling price of $1,187 per net ton in 2021.
Price Performance
Cleveland-Cliffs’ shares have gained 14% in the past year compared with 2.3% decline of the industry.
Zacks Rank & Other Stocks to Consider
Cleveland-Cliffs carries a Zacks Rank #3 (Hold).
Better-ranked stocks worth considering in the basic materials space include Commercial Metals Company (CMC - Free Report) , Albemarle Corporation (ALB - Free Report) and AdvanSix Inc. (ASIX - Free Report) .
Commercial Metals, sporting a Zacks Rank #1 (Strong Buy), has a projected earnings growth rate of 62% for the current fiscal year. The Zacks Consensus Estimate for CMC's current fiscal year earnings has been revised 22.7% upward over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Commercial Metals beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missed once. It has a trailing four-quarter earnings surprise of roughly 13.1%, on average. CMC has rallied around 61% in a year.
Albemarle, carrying a Zacks Rank #1, has an expected earnings growth rate of 56.2% for the current year. ALB's consensus estimate for the current year has been revised 8.9% upward over the past 60 days.
Albemarle beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 22.1%. ALB shares have gained around 40% in a year.
AdvanSix, carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 7.4% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 3.2% upward in the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average being 46.9%. ASIX has rallied around 67% in a year.