Cleveland-Cliffs expects adjusted earnings to exceed $4 billion in 2027
Key Facts
Cleveland-Cliffs forecast adjusted earnings before interest, taxes, depreciation and amortization of more than $4 billion in 2027, according to its third-quarter 2026 earnings statement. The company attributed its improved outlook to newly signed customer contracts. It reported diluted earnings per share under generally accepted accounting principles of $0.26 in the third quarter. The return to profitability followed a net loss of $134 million in the second quarter of the same year, according to its previous earnings statement. The company had posted a net loss of $234 million in the third quarter of 2025, putting the latest results against loss-making comparisons both sequentially and year-on-year.
When it reported second-quarter results, Cleveland-Cliffs had guided for third-quarter adjusted earnings before interest, taxes, depreciation and amortization of about $575 million. The measure stood at $286 million in the second quarter of 2026, according to the company's statement for that period. In the corresponding quarter of 2025, the company recorded adjusted earnings on the same basis of $143 million. In the second-quarter statement, management identified repricing fixed-price contracts at higher levels as an opportunity to improve future earnings. Barron's also linked the company's improved prospects to tariffs and new customer contracts, describing the two factors as supporting its outlook.
On the operational front, steel product sales to external customers totaled 4,150 thousand net tons in the third quarter, according to the earnings statement. The average selling price for steel products was $1,177 per net ton during the same period. Direct sales to the automotive industry accounted for 28% of the group's steelmaking revenue. Alongside the results announcement, the company decided to idle Stelco's galvanizing lines. It said in its statement that it would idle those lines "indefinitely," without setting a date for operations to resume.
On the financial front, cash flow from operating activities totaled $224 million in the third quarter, according to Cleveland-Cliffs' statement. The company ended the period with cash and cash equivalents of $77 million. Its long-term debt stood at $7,645 million as of September 30, 2026. The return to earnings per share was thus accompanied by positive operating cash flow, while long-term debt remained above the cash balance. Management included reducing the ratio of net debt to earnings before interest, taxes, depreciation and amortization among its objectives for the period ahead.
In the market, the company's shares, traded under the ticker CLF, closed at $14.1 in the October 19, 2026 session, according to EL7 data. They had closed at $12.12 in the October 16 session. The rise in the closing price coincided with the announcement of third-quarter earnings per share and an improved outlook for future earnings. Developments outlined by the company included new customer contracts alongside the decision to idle Stelco's galvanizing lines. Barron's placed the improved outlook in the context of support from tariffs and contracts, without attributing it solely to the earnings-per-share result.
Attention now turns to the fourth quarter of 2026, for which the company expects adjusted earnings before interest, taxes, depreciation and amortization of about $715 million. The estimate forms part of the improved outlook management presented in the third-quarter earnings statement. Guidance extends into 2027, with the company basing its earnings estimate on newly signed customer contracts. On the balance sheet, it set mid-2027 as the target for bringing its ratio of net debt to earnings before interest, taxes, depreciation and amortization below 2.5 times. The company said its goal was to reduce the ratio to "below 2.5 times," alongside its expectations for improved earnings.