Abstract
Cleveland-Cliffs will report fourth-quarter earnings on February 09, 2026, Pre-Market. This preview synthesizes the company’s last-quarter performance, current-quarter forecasts, segment dynamics, and institutional commentary to frame expectations and key swing factors ahead of the release.Market Forecast
Consensus and company-guided indications imply fourth-quarter revenue around $4.59 billion, adjusted EPS near -$0.60, and EBIT approximately -$0.26 billion, with year-over-year revenue growth estimated at 03.53%, EPS year-over-year growth at 02.23%, and EBIT year-over-year growth at -07.79%; margin commentary suggests modest pressure with no explicit gross margin guidance and a negative net margin likely persisting. Highlights center on steel operations remaining the core engine with a concentrated revenue base and a demand mix tied to automotive and construction end-markets. The most promising segment is steel, contributing $4.56 billion last quarter with year-over-year growth implied by low single-digit expansion, though pricing and input-cost trends will drive realized performance.Last Quarter Review
Cleveland-Cliffs posted third-quarter revenue of $4.73 billion, a gross profit margin of -00.97%, GAAP net profit attributable to the parent company of -$0.25 billion, a net profit margin of -05.30%, and adjusted EPS of -$0.51, with year-over-year revenue growth at 03.61% and adjusted EPS year-over-year growth at 01.92%. A notable highlight was the sequential stabilization in shipment volumes despite pricing headwinds and lingering raw-material cost drag. Main business highlights: steel generated $4.56 billion in revenue, while other operations contributed $0.17 billion; year-over-year momentum was modest, reflecting resilient end-market demand offset by margin compression.Current Quarter Outlook
Main Business: Steel Operations
Steel remains the pivotal revenue driver for Cleveland-Cliffs, with last quarter’s $4.56 billion underscoring the company’s integrated footprint from ore to hot-rolled and downstream coated products. For the current quarter, the forecast revenue of $4.59 billion suggests limited top-line growth as a combination of pricing normalization and seasonally softer shipments temper volume gains. Margins are the focal concern: last quarter’s -00.97% gross margin reflected unfavorable spreads between realized steel prices and cost inputs, including iron ore, coal, energy, and maintenance. Any improvement will hinge on steel price stability in flat-rolled products and lower scrap or ore input costs; however, the forecasted EBIT of -$0.26 billion and EPS of -$0.60 point to continued pressure, indicating that cost relief and mix improvements may lag pricing recovery.Operational execution will be crucial. The company’s position supplying automotive OEMs means contract pricing resets and demand variability can drive quarter-to-quarter outcomes. If automotive schedules hold and spot prices for hot-rolled coil stabilize, sequential margin lift is plausible, but the modeled negative EBIT implies that tailwinds may be insufficient to offset cost and seasonality. Inventory management and production cadence across blast furnaces and downstream finishing lines will also influence absorption and cost per ton, shaping gross margin outcomes.
Most Promising Business: Value-Added Flat-Rolled and Coated Products
Within the steel portfolio, value-added flat-rolled and coated products, especially those tied to automotive and select appliance and construction end-markets, anchor the company’s growth potential. Last quarter’s steel revenue of $4.56 billion, with low single-digit year-over-year expansion, shows demand resilience despite margin compression. For the current quarter, anything that lifts contract and spot realization—such as improved automotive schedules, fewer outages, and better mix—could provide revenue stability and incremental margin support. The forecast’s modest year-over-year revenue growth of 03.53% points to steady demand, but profitability depends on spreads.The company’s integrated steelmaking model offers leverage to lower purchased raw material needs and potential cost advantages when iron ore prices are benign. If input costs ease and operational reliability improves, the coated and downstream product mix can expand contribution margins. Conversely, if energy costs remain elevated or maintenance expenses rise, these products will still generate revenue but may dilute overall profitability.
Stock Price Swing Factors This Quarter
The stock will likely react to three key elements: margin trajectory, shipment volumes, and forward pricing commentary. First, margin trajectory is central, given the prior quarter’s -05.30% net margin and -00.97% gross margin; investors will parse whether the company can move EBIT closer to breakeven despite the forecast at -$0.26 billion. Second, shipment volumes in automotive and construction-linked products will signal demand health; stable or improving volumes could offset pricing drag. Third, management’s commentary on contract resets, spot price trends in hot-rolled coil, and input costs will shape expectations for the next two quarters; guidance hinting at better spreads and cost relief could catalyze sentiment.Cash discipline and capital allocation decisions—such as maintenance timing and any updates on debt or liquidity—may also influence valuation, especially if the company outlines a path to normalized margins as pricing stabilizes. Any unexpected outages or operational disruptions would be negative, whereas smooth production and consistent deliveries could support an inflection narrative.
Analyst Opinions
Institutional commentary over recent weeks has trended cautious, with a majority leaning bearish on near-term earnings due to margin pressure and the modeled negative EPS and EBIT in the current quarter forecast. Analysts highlight the gap between realized steel prices and cost inputs as the core headwind, pointing to prior-quarter negative gross margin as evidence that spreads remain tight. Several well-known sell-side desks characterize the quarter as transitional, with expectations that pricing and contract resets may need one to two quarters before margins normalize.Bearish opinions emphasize that the forecasted EPS of -$0.60 and EBIT of -$0.26 billion underscore continuing profitability challenges, and they expect revenue near $4.59 billion to reflect steady demand but insufficient pricing power to drive margin expansion. Commentary notes that while year-over-year revenue growth is modest at 03.53%, the negative EBIT year-over-year change of -07.79% suggests worsening operating leverage in the near term. These views stress the importance of management’s guidance on spreads and input-cost relief; absent clear improvement signals, they expect the stock to trade on cautious revisions rather than upside surprises.
In summary, the market anticipates a quarter with stable revenue but pressured profitability, and the majority of institutional views remain cautious until evidence of spread recovery, improved gross margins, and better contract pricing emerges in guidance.
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