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Why Is Cleveland-Cliffs (CLF) Down 21.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Cleveland-Cliffs (CLF - Free Report) . Shares have lost about 21.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cleveland-Cliffs due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cleveland-Cliffs’ Q2 Earnings Top Estimates, Sales Miss
Cleveland-Cliffs’ second-quarter 2024 adjusted earnings were 11 cents per share, down from 69 cents in the prior-year quarter. The Zacks Consensus Estimate was pegged at break-even for the quarter.
Revenues fell 14.9% to roughly $5.09 billion in the quarter. The top line missed the Zacks Consensus Estimate of $5.2 billion.
Operational Highlights
The company reported Steelmaking revenues of roughly $4.9 billion in the second quarter, down around 15.4% year over year.
Average net selling price per net ton of steel products was $1,125 in the quarter, down around 10.3% year over year. It was below our estimate of $1,135. External sales volumes for steel products were roughly 4 million net tons, down around 5.1% year over year. It was modestly below our estimate of 4.1 million net tons.
Financial Position
Cleveland-Cliffs ended the second quarter with cash and cash equivalents of $110 million, up around 267% sequentially. Long-term debt decreased 4.3% sequentially to $3,507 million.
Net cash provided by operating activities was $519 million.
Cleveland-Cliffs repurchased 7.5 million shares during the second quarter. It recorded a free cash flow of $362 million.
Outlook
Cliffs has reduced its projected capital expenditures for 2024 to $650-$700 million from $675-$725 million expected earlier. Furthermore, its goal of reducing steel unit costs by about $30 per net ton year over year is on track.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -317.26% due to these changes.
VGM Scores
At this time, Cleveland-Cliffs has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cleveland-Cliffs has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Cleveland-Cliffs (CLF) Down 21.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Cleveland-Cliffs (CLF - Free Report) . Shares have lost about 21.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cleveland-Cliffs due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Cleveland-Cliffs’ Q2 Earnings Top Estimates, Sales Miss
Cleveland-Cliffs’ second-quarter 2024 adjusted earnings were 11 cents per share, down from 69 cents in the prior-year quarter. The Zacks Consensus Estimate was pegged at break-even for the quarter.
Revenues fell 14.9% to roughly $5.09 billion in the quarter. The top line missed the Zacks Consensus Estimate of $5.2 billion.
Operational Highlights
The company reported Steelmaking revenues of roughly $4.9 billion in the second quarter, down around 15.4% year over year.
Average net selling price per net ton of steel products was $1,125 in the quarter, down around 10.3% year over year. It was below our estimate of $1,135. External sales volumes for steel products were roughly 4 million net tons, down around 5.1% year over year. It was modestly below our estimate of 4.1 million net tons.
Financial Position
Cleveland-Cliffs ended the second quarter with cash and cash equivalents of $110 million, up around 267% sequentially. Long-term debt decreased 4.3% sequentially to $3,507 million.
Net cash provided by operating activities was $519 million.
Cleveland-Cliffs repurchased 7.5 million shares during the second quarter. It recorded a free cash flow of $362 million.
Outlook
Cliffs has reduced its projected capital expenditures for 2024 to $650-$700 million from $675-$725 million expected earlier. Furthermore, its goal of reducing steel unit costs by about $30 per net ton year over year is on track.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -317.26% due to these changes.
VGM Scores
At this time, Cleveland-Cliffs has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Cleveland-Cliffs has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.