Cleveland-Cliffs (CLF): Strongest quarter in three years as steel prices lift it back to a profit
Cleveland-Cliffs, a major US maker of flat steel (sheet and coil), reported a profit of $165m for the three months to 30 September 2026, against a $134m loss in the previous quarter. Sales were $5.6bn, and the company said imports remain well below historical levels. It also gave its own forecast for a stronger fourth quarter.
What happened
On Monday 19 October 2026, Cleveland-Cliffs published its third-quarter results in a filing with the US Securities and Exchange Commission and held a call at 8:30 am Eastern time. The company sold $5,612m of goods, shipped about 4.15 million net tons of steel, and made a net profit of $165m, of which $152m belongs to its own shareholders (the rest belongs to minority owners of some subsidiaries). That works out at $0.26 a share on the standard accounting basis (GAAP), or $0.28 a share once a few one-off items are removed. Chairman and chief executive Lourenco Goncalves called it "our strongest quarter in three years". The company also said it is idling the galvanizing lines at its Canadian unit Stelco, citing a "clearly oversupplied market for galvanized steel in Canada", while keeping hot-rolled production running and about 2,000 Canadian jobs.
The numbers, explained
Start with sales. Revenue of $5,612m compares with $5,226m in the previous quarter and $4,734m a year earlier. Our working: 5,612 minus 5,226 is 386, which is 7.4% more than last quarter; 5,612 minus 4,734 is 878, which is 18.5% more than a year ago. Two things drove it. Shipments rose to 4,150 thousand net tons from 4,025 thousand last quarter (up 3.1%) and 4,029 thousand a year ago (up 3.0%). The average price per ton also rose, to $1,177 from $1,124 last quarter (up 4.7%) and $1,032 a year ago (up 14.1%). In other words, most of the yearly growth in sales came from a higher price, not more steel.
Now profit. Adjusted EBITDA, which is earnings before interest, tax, and the wear-and-tear charges on equipment, with some one-off items removed, was $612m. That is a company-defined measure, not a GAAP figure. It compares with $286m last quarter and $143m a year ago: 612 divided by 286 is about 2.1 times, and 612 divided by 143 is about 4.3 times. As a share of sales it was 10.9% (612 divided by 5,612), against 5.5% last quarter and 3.0% a year ago. The company had forecast about $575m three months ago, so the result was $37m, or 6.4%, above its own forecast. On cash, operations produced $224m in the quarter, against a $143m outflow a year earlier, and spending on equipment was $152m; our simple subtraction leaves about $72m (the company does not report this as a figure in the release).
Why it matters
Cleveland-Cliffs makes steel from iron ore and scrap and sells it mainly as flat sheet and coil. By its own split, about 34% of steelmaking sales went to distributors and converters, 28% to car makers, 28% to infrastructure and manufacturing, and 10% to other steel producers. A steel maker has high fixed costs, such as furnaces and workers, so when prices and volumes rise, a large part of each extra dollar of sales becomes profit. That is why EBITDA more than doubled while sales rose only 7%. The company says imports are "well below historical levels" and that customers face "extended" lead times, which supports prices for domestic mills; its filing also lists US trade rules (Section 232 tariffs, the USMCA trade agreement, and anti-dumping duties) as risks that could change.
The picture has limits. The company still carries heavy borrowings: long-term debt was $7,645m at 30 September, up from $7,253m at the end of 2025, against $77m of cash. Our working puts debt net of cash at about $7.6bn (7,645 minus 77 is 7,568); Cleveland-Cliffs did not report that figure. Its stated target is to bring net debt below 2.5 times EBITDA by mid-2027. Revenue was also below what analysts expected, according to GuruFocus (about $5.72bn expected, an analyst estimate), while the $0.28 adjusted profit per share was $0.04 above their estimate. For customers, higher prices raise costs; for rival mills, they help margins; and for the Canadian unit, the oversupply shows that strength in the US is not shared everywhere.
What to watch next
The company's own forecast, which is not an outcome, is adjusted EBITDA of about $715m in the fourth quarter, which would be 16.8% above the third quarter's $612m (103 divided by 612). It said it expects "a major debt reduction" in the quarter, helped by free cash flow and property sales, and adjusted EBITDA above $4bn in 2027 based on contract changes and its price forecasts. Fourth-quarter results are expected in early 2027; the date has not been announced in the sources we read. Other facts to follow are further news on the idled Stelco galvanizing lines, and any change to US steel trade rules named in the filing. We make no prediction about any of these.
Sources
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