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The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed twice. It has a trailing four-quarter negative earnings surprise of roughly 2.5%, on average.
Cleveland-Cliffs posted an earnings surprise of around 9.1% in the last reported quarter. CLF is likely to have gained from improved sales volumes and lower energy and raw material costs in the first quarter. Lower unit costs are likely to have driven its margins.
The stock has lost 42.9% in a year’s time compared with the industry’s 18.1% decline.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for the upcoming announcement.
Zacks Model
Our proven model predicts an earnings beat for Cleveland-Cliffs this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Cleveland-Cliffs is +25.28%. The Zacks Consensus Estimate for the first quarter is currently pegged at a loss of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cleveland-Cliffs currently carries a Zacks Rank #3.
What do the Estimates Say?
The company recently announced its preliminary financial results for the first quarter. It anticipates steel shipments to be 4.1 million net tons, while revenues are projected to be around $5.2 billion. Furthermore, it expects to achieve an adjusted EBITDA of roughly $200 million for the quarter.
The Zacks Consensus Estimate for first-quarter consolidated revenues for Cleveland-Cliffs is currently pegged at $5,218 million, which suggests a year-over-year decline of 12.4%.
The Zacks Consensus Estimate for Steelmaking revenues currently stands at $5,088 million, suggesting a rise of 3.8% on a sequential comparison basis.
The consensus estimate for external sales volumes for steel products stands at 4,165 million net tons, reflecting a sequential rise of 8.5%. The same for average net selling price per net ton of steel products is pegged at $1,123 for the quarter, indicating a 2.9% sequential decline.
Some Factors to Watch For
Cleveland-Cliffs is expected to have gained from lower raw material and energy costs in the March quarter. It is also expected to have benefited from actions to lower unit costs. Lower steelmaking unit costs are likely to have supported margins in the first quarter.
The company is also expected to have benefited from improved end-market demand for steel in the quarter. It is likely to have witnessed improved volumes in the automotive market. Improved demand in its end markets is likely to have driven its overall volumes in the quarter to be reported.
Meanwhile, U.S. steel prices rebounded in the first quarter after tumbling in the fourth quarter of 2022. The benchmark hot-rolled coil ("HRC") prices strengthened during the March quarter driven by U.S. steel mills’ price hike actions, low import levels, supply tightness partly due to mill outages and a recovery in demand.
Despite the recovery in HRC prices, the impacts of lower average selling prices are likely to reflect on the company’s revenues in the quarter to be reported.
Here are some companies in the basic materials space you may want to consider, as our model shows these too have the right combination of elements to post an earnings beat this quarter:
The consensus estimate for U.S. Steel’s first-quarter earnings has been revised 124.6% upward in the past 60 days. The Zacks Consensus Estimate for X’s earnings for the quarter is pegged at 63 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , slated to release earnings on May 2, has an Earnings ESP of +4.35%.
The consensus estimate for Axalta Coating Systems’ earnings for the first quarter is currently pegged at 31 cents. AXTA currently carries a Zacks Rank #3.
Ternium S.A. (TX - Free Report) , scheduled to release earnings on Apr 25, has an Earnings ESP of +10.85% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for TX’s first-quarter earnings has been revised 58% upward in the past 60 days. The consensus estimate for TX’s earnings for the first quarter is currently pegged at 98 cents.
Image: Bigstock
Cleveland-Cliffs (CLF) to Post Q1 Earnings: What's in Store?
Cleveland-Cliffs Inc. (CLF - Free Report) is slated to release first-quarter 2023 results after the closing bell on Apr 24.
The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed twice. It has a trailing four-quarter negative earnings surprise of roughly 2.5%, on average.
Cleveland-Cliffs posted an earnings surprise of around 9.1% in the last reported quarter. CLF is likely to have gained from improved sales volumes and lower energy and raw material costs in the first quarter. Lower unit costs are likely to have driven its margins.
The stock has lost 42.9% in a year’s time compared with the industry’s 18.1% decline.
Image Source: Zacks Investment Research
Let’s see how things are shaping up for the upcoming announcement.
Zacks Model
Our proven model predicts an earnings beat for Cleveland-Cliffs this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Cleveland-Cliffs is +25.28%. The Zacks Consensus Estimate for the first quarter is currently pegged at a loss of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cleveland-Cliffs currently carries a Zacks Rank #3.
What do the Estimates Say?
The company recently announced its preliminary financial results for the first quarter. It anticipates steel shipments to be 4.1 million net tons, while revenues are projected to be around $5.2 billion. Furthermore, it expects to achieve an adjusted EBITDA of roughly $200 million for the quarter.
The Zacks Consensus Estimate for first-quarter consolidated revenues for Cleveland-Cliffs is currently pegged at $5,218 million, which suggests a year-over-year decline of 12.4%.
The Zacks Consensus Estimate for Steelmaking revenues currently stands at $5,088 million, suggesting a rise of 3.8% on a sequential comparison basis.
The consensus estimate for external sales volumes for steel products stands at 4,165 million net tons, reflecting a sequential rise of 8.5%. The same for average net selling price per net ton of steel products is pegged at $1,123 for the quarter, indicating a 2.9% sequential decline.
Some Factors to Watch For
Cleveland-Cliffs is expected to have gained from lower raw material and energy costs in the March quarter. It is also expected to have benefited from actions to lower unit costs. Lower steelmaking unit costs are likely to have supported margins in the first quarter.
The company is also expected to have benefited from improved end-market demand for steel in the quarter. It is likely to have witnessed improved volumes in the automotive market. Improved demand in its end markets is likely to have driven its overall volumes in the quarter to be reported.
Meanwhile, U.S. steel prices rebounded in the first quarter after tumbling in the fourth quarter of 2022. The benchmark hot-rolled coil ("HRC") prices strengthened during the March quarter driven by U.S. steel mills’ price hike actions, low import levels, supply tightness partly due to mill outages and a recovery in demand.
Despite the recovery in HRC prices, the impacts of lower average selling prices are likely to reflect on the company’s revenues in the quarter to be reported.
Cleveland-Cliffs Inc. Price and EPS Surprise
Cleveland-Cliffs Inc. price-eps-surprise | Cleveland-Cliffs Inc. Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these too have the right combination of elements to post an earnings beat this quarter:
United States Steel Corporation (X - Free Report) , slated to release earnings on Apr 27, has an Earnings ESP of +1.79% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for U.S. Steel’s first-quarter earnings has been revised 124.6% upward in the past 60 days. The Zacks Consensus Estimate for X’s earnings for the quarter is pegged at 63 cents.
Axalta Coating Systems Ltd. (AXTA - Free Report) , slated to release earnings on May 2, has an Earnings ESP of +4.35%.
The consensus estimate for Axalta Coating Systems’ earnings for the first quarter is currently pegged at 31 cents. AXTA currently carries a Zacks Rank #3.
Ternium S.A. (TX - Free Report) , scheduled to release earnings on Apr 25, has an Earnings ESP of +10.85% and currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for TX’s first-quarter earnings has been revised 58% upward in the past 60 days. The consensus estimate for TX’s earnings for the first quarter is currently pegged at 98 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.