Cleveland-Cliffs raises adjusted operating earnings forecast to more than $4 billion in 2027
Key Facts
Cleveland-Cliffs raised its forecast for adjusted earnings before interest, taxes, depreciation and amortization to more than $4 billion in 2027, according to Reuters, as it announced third-quarter results on October 19, 2026. Management's previous outlook indicated the measure could reach $3.3 billion in the same year, according to a report published by Investing.com. The new forecast is tied to the contracts and index price expectations the company uses to estimate its future performance. The company reported GAAP net income of $165 million for the third quarter in its earnings release. The return to profitability followed a GAAP net loss of $134 million in the second quarter of the year.
The company's revenue totaled $5.6 billion in the third quarter of 2026, compared with $5.2 billion in the second quarter, according to the earnings release. Revenue growth was accompanied by an improvement in adjusted earnings per share, which reached $0.28 for the reported period. Analysts had expected adjusted earnings of 19 cents per share, according to London Stock Exchange Group data cited by Reuters. Adjusted earnings per share thus exceeded analyst estimates, alongside an increase in sales from the previous quarter. The earnings beat came as the company's GAAP result swung from a loss to a profit, with higher selling prices and lower costs among the drivers of the recovery cited by Reuters.
Cleveland-Cliffs reported adjusted earnings before interest, taxes, depreciation and amortization of $612 million in the third quarter, according to its release. The company had generated $286 million on the same measure in the second quarter, making the latest quarterly result more than double the previous period's level. The result also exceeded management's previously issued guidance of $575 million for the reported quarter. The improvement therefore extended to comparisons with both the previous quarter's actual performance and the company's estimate for its third-quarter performance. The beat against management's guidance for this measure coincided with adjusted earnings per share exceeding analyst expectations, while the company raised its adjusted earnings outlook for next year.
Reuters attributed the company's return to profitability to "higher prices and lower costs," describing the drivers of the third-quarter improvement. The average realized selling price for steel products was $1,177 per net ton, according to figures released by Cleveland-Cliffs. The average realized price had been $1,124 per net ton in the second quarter, before the improvement recorded in the following period. The price the company realized from selling its products thus rose alongside quarterly revenue, while lower costs also contributed to the return to profit, according to Reuters. The increase in selling prices featured in the results of a company focused on value-added flat-rolled steel products, particularly those serving the North American automotive industry.
Direct sales to the automotive sector accounted for 28% of Cleveland-Cliffs' steelmaking revenue in the third quarter, according to the company's release. That share reflects the presence of automotive customers in the business of a steelmaker focused on serving the industry in North America. In the market, the company's shares rose as much as 14% before U.S. trading opened on October 19, 2026, according to Reuters. The move accompanied the announcement of a return to profitability and a higher adjusted earnings forecast for next year. The rise occurred in premarket trading on the day results were announced, as the company disclosed quarterly performance that exceeded management's guidance and analyst expectations for adjusted earnings per share.
The company entered the following period with total liquidity of $3.2 billion at the end of the third quarter, according to its earnings release. The reported liquidity balance was as of September 30, 2026, at the close of the period in which it returned to net profit. For the fourth quarter of 2026, Cleveland-Cliffs expects adjusted earnings before interest, taxes, depreciation and amortization of about $715 million. That guidance puts expected earnings for the final quarter above the level achieved in the third quarter, after that quarter's result exceeded management's previous estimate. The outlook for 2027 remains tied to the contracts and index price expectations underpinning the company's adjusted earnings estimates.