Cleveland-Cliffs (NYSE:CLF) shares climbed nearly 7% in premarket trading on Thursday after the steel producer issued a stronger-than-expected outlook for the third quarter, despite reporting a slight earnings miss for the second quarter.
Investors focused on the company’s improving profitability and expectations for a significant increase in EBITDA during the current quarter.
Second-quarter earnings narrowly miss estimates
Cleveland-Cliffs reported an adjusted loss of $0.20 per share for the second quarter, slightly below analysts’ expectation of a $0.19 per share loss.
Revenue totalled $5.2 billion, matching market forecasts and increasing 9% from $4.8 billion in the same period last year.
Adjusted EBITDA reached $286 million during the quarter, more than tripling from $95 million reported in the first quarter, reflecting improving operating performance.
Third-quarter guidance beats expectations
The company forecast adjusted EBITDA of approximately $575 million for the third quarter of 2026, more than double the level achieved in the previous quarter and well ahead of analysts’ expectations.
Cleveland-Cliffs also reaffirmed its full-year steel shipment guidance of between 16.5 million and 17.0 million net tons.
Chairman and Chief Executive Officer Lourenco Goncalves said, “The second quarter marked another step in returning to the earnings power this company is capable of and has demonstrated in the past.”
He added, “Even with extended maintenance outages in April and May, our second quarter adjusted EBITDA tripled from the Q1 level and Q3 adjusted EBITDA is expected to more than double Q2.”
Steel pricing and demand continue to improve
Steel product sales volumes reached 4.0 million net tons during the quarter, with the automotive sector accounting for 29% of the company’s direct sales.
The average net selling price increased to $1,124 per ton from $1,048 in the first quarter, reflecting stronger pricing across the business.
Goncalves also said the U.S. steel market continues to strengthen, supported by improving customer demand, lower import volumes and longer delivery lead times.
Company targets lower leverage
Cleveland-Cliffs ended the quarter with liquidity of $3.1 billion as of June 30, 2026.
Management said it remains on track to reduce its leverage ratio to below 2.5 times debt-to-EBITDA within the next year, highlighting continued confidence in the company’s balance sheet and earnings recovery.
Cleveland-Cliffs stock price
