Latest news with #LourencoGoncalves
Yahoo
6 days ago
- Automotive
- Yahoo
Why Cleveland-Cliffs Rallied Today
Key Points Cleveland-Cliffs beat revenue and earnings expectations. Its CEO sounded optimistic on the prospect for tariff-related benefits. However, those benefits have yet to come through in a material way. 10 stocks we like better than Cleveland-Cliffs › Shares of Cleveland-Cliffs (NYSE: CLF) rallied 5.6% on Tuesday as of 2:26 p.m. ET. The U.S.-based steelmaker reported second-quarter earnings today, and while revenue and earnings were down relative to last year, both metrics actually beat expectations. Furthermore, CEO Lourenco Goncalves was optimistic that the recent increase in steel tariffs should soon benefit the company. Cleveland delivers a beat, though it has a ways to go In the second quarter, Cleveland-Cliffs saw revenue decline by 3.1% to $4.9 billion, while adjusted (non-GAAP) earnings per share (EPS) fell to a loss of $0.50 per share from a positive $0.11 EPS in the year-ago quarter. Despite year-over-year declines, those figures actually came in ahead of expectations. It was also an especially trying quarter for carmakers in the wake of April 2 "Liberation Day" and the uncertainty that followed. Of note, autos encompass a significant part of Cleveland Cliffs' revenue. Still, Goncalves struck a an optimistic tone, saying that the recent steel tariffs were on the brink of helping Cleveland-Cliffs more than they were hurting demand, In the earnings press release, he said: We have started to see the positive impact that tariffs have on domestic manufacturing, protecting domestic jobs and national security. We expect this trend to continue, promoting the resurgence of the American automotive industry supported by a thriving domestic steel industry. ... Going forward, foreign competitors need to acquire steel capacity within the United States if they want to participate in this desirable market. As a publicly traded America-based company centered on automotive, electrical steels, stainless and plate, Cleveland-Cliffs' assets, business and footprint are uniquely positioned to benefit from this new reality. But much remains in doubt for Cleveland-Cliffs While Goncalves' statement is encouraging, it's not the first time he has been exceedingly optimistic about Cleveland-Cliffs' prospects. Moreover, it's unclear exactly how new tariffs will impact Cleveland-Cliffs' near-term financials. After all, amid the initial demand destruction resulting from new tariffs, Cleveland-Cliffs actually idled one its major blast furnaces, and either fully idled or partially idled several of its iron ore mines. And while tariffs have curtailed foreign competition, the market share of imports for finished steel have only declined by 5 percentage points, from 25% in January to 20% in May. While management predicts increased demand for steel and decreased exports over time, we have yet to see material evidence of that big advantage for domestic steelmakers. At the moment, Cleveland Cliffs is losing money and cutting costs in an attempt to produce cash flow to pay down its debt; in that light, it would be better for investors to take a wait-and-see approach to see if the purported tariff benefits really materialize. As of now, there is too much uncertainty to chase today's rally in the stock. Should you invest $1,000 in Cleveland-Cliffs right now? Before you buy stock in Cleveland-Cliffs, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Cleveland-Cliffs wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $665,092!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,477!* Now, it's worth noting Stock Advisor's total average return is 1,055% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why Cleveland-Cliffs Rallied Today was originally published by The Motley Fool
Yahoo
6 days ago
- Business
- Yahoo
Steel plant in Vance's hometown trades clean future for more coal
A year ago, the Rust Belt hometown of Vice President JD Vance represented a new era of climate-friendly steelmaking, set on that course by the clean energy policies of the Biden administration. Now, six months into President Donald Trump's second term, the Cleveland-Cliffs steel plant in Middletown, Ohio, looks very much like its past, doubling down on coal and relying on steel tariffs to help turn a profit. The Middletown plant that employed Vance's grandfather and lifted his family out of poverty was supposed to be the future of manufacturing, boosted by former President Joe Biden's climate and infrastructure laws. By repowering a blast furnace with hydrogen and natural gas and cutting its reliance on coal, the facility would have been on its way to cranking out steel and reducing its climate pollution. On Monday, Cleveland-Cliffs CEO Lourenco Goncalves declared the experiment over. Instead, he told investors on an earnings call that he was now working with the Department of Energy to 'enhance Middletown using beautiful coal, beautiful coke,' echoing Trump's claims about one of the nation's most-polluting fuels. 'It's clear by now that we will not have availability of hydrogen, so there is no point in pursuing something that we know for sure that's not going to happen,' Goncalves said. 'We informed the DOE that we would not be pursuing that project.' The journey of the Middletown plant traces the Trump administration's rapid dismantling of Biden's vision for a lower-carbon future that was designed to create jobs and grow the economy while boosting American clean tech innovation and shifting the economy away from its reliance on fossil fuels. The Biden plan to transform the clean energy economy relied on hundreds of billions of dollars in subsidies and incentives, which in turn would help generate additional private investment. The Trump administration has almost completely reversed that approach, undercutting both the Inflation Reduction Act and the bipartisan infrastructure law — and pledging to increase the nation's reliance on coal and other fossil fuels. A Vance spokesperson did not respond to a request for comment on the Cleveland-Cliffs plan for the Middletown plant. But the White House said its policies are helping American steel. 'After languishing under a Biden-era stranglehold — plagued by unfair foreign competition, job losses, and weakened national security as imports flooded the market and domestic production stalled — the steel industry is quickly roaring back to life,' the White House said in a statement on Tuesday. Under Biden, the Middletown plant was supposed to receive a $500 million federal grant to repower a coal-fired blast furnace in order to produce steel with clean hydrogen and natural gas. For decades, a mist of black soot has blanketed the cars and homes of the people who live closest to the plant. Had the hydrogen plan been implemented, it could have transformed one of the dirtiest steel plants in the country into one of the cleanest. It would have created an additional 200 permanent jobs and 1,200 construction jobs at the plant that now employs about 2,500. The Biden administration wanted the Cleveland-Cliffs plant to spark a new Industrial Revolution in cleaner technologies. 'Clean steel is the future, everyone knows that, and to pretend otherwise is sticking your head in the sand,' said Leah Stokes, professor at the University of California, Santa Barbara, who advised the Biden administration on clean energy policy. 'We can either lead globally and claim a big part of the future of clean industries or we can be laggards and continue to lose to countries like China.' But the market for greener steel in the U.S. has yet to take off at scale. The Biden administration invested in the plant to drive a hydrogen-based manufacturing hub in the region. That's because there is not a viable large-scale clean hydrogen market that could supply multiple industries working to cut carbon pollution. In the Biden administration, Goncalves said he could 'make the hydrogen hub viable.' By Monday, he sounded like Trump in his praise for coal, telling investors his company relied on 'American iron ore and American coal and American natural gas as feedstock, all produced right here in the United States of America.' While Goncalves did not specify how the administration was helping his company with the coal it purchases, Cleveland-Cliffs' bottom line has been boosted by a 50 percent tariff that Trump imposed on imported steel last month — doubling the rate from 25 percent. As with other tariffs, that's a cost largely borne by customers, and the hike already has shown up in the price tag for some vehicles. Trump has leaned heavily on tariffs in his second term, claiming they will lead to a rebound in American manufacturing and create jobs throughout the country. It's a strategy he also tried in his first term — though it did not yield a manufacturing boom. Where the Biden plan used tax incentives and grants — funded through taxpayer dollars — the Trump plan relies on steep tariffs passed along to consumers, said Scott Lincicome, vice president of general economics at the conservative Cato Institute. The U.S. steel industry is the fourth largest of any country in the world, he said, and has long leveraged 'cronyism' to get more government incentives and generate higher profits rather than relying on a free market. 'We have the fourth-largest steel industry in the world, so the idea that this industry needs government help is pretty fantastical,' he said. 'The reason that tariffs are so universally derided is because they're just a really inefficient, distortionary and indirect way to protect or boost domestic industry.' He said the Cleveland-Cliffs decision to avoid increasing its reliance on natural gas and clean hydrogen was another backward-looking move to keep using a more expensive and dirtier fuel source that drives up pollution and prices at the same time. 'It's the worst-choice policy and worst-choice energy source,' he said.
Yahoo
22-07-2025
- Business
- Yahoo
Cleveland-Cliffs Rides Cost Cuts And Trump Tariffs To Stronger Outlook, Eyes Billions From Asset Sales
Cleveland-Cliffs Inc. (NYSE:CLF) is gaining renewed confidence from Wall Street after posting better-than-expected results for the second quarter of 2025, prompting KeyBanc Capital Markets analyst Philip Gibbs to upgrade the stock to Overweight and set a price forecast of $14. The move reflects a more favorable risk-reward outlook for the steelmaker, which is capitalizing on robust domestic demand, aggressive cost-cutting, and strategic shifts amid a supportive policy environment. Cleveland-Cliffs reported a narrower second-quarter 2025 adjusted loss of $0.50 per share, beating expectations, with revenue of $4.93 billion. Also Read: Steel Dynamics Sees Q2 Rebound From Q1 But Still Trails Street Forecast Steel shipments reached a record 4.3 million net tons, though the average selling price declined. Cost-cutting efforts, including the idling of six facilities, reduced steel unit costs by $15 per ton. Adjusted EBITDA turned positive at $97 million. The company lowered its 2025 capital expenditure and SG&A guidance and expects further cost improvements in the second half. CEO Lourenco Goncalves emphasized strong domestic steel demand, a healthy order book, and policy support from the Trump administration. He noted that a loss-making slab supply deal will end soon, further supporting margins and accelerating free cash flow and debt reduction. Gibbs stated that the upgrade reflects his increased confidence in Cleveland-Cliffs' cost-cutting efforts and operational efficiencies, especially within its high-margin automotive segment. He also pointed to trade protections and reshoring trends as favorable tailwinds that position the company to gain market share. The analyst revised his 2025 outlook, narrowing projected losses due to improved margins and lower production costs. He now forecasts 2025 EBITDA of $419 million, more than double his previous estimate. For the third quarter of 2025, he raised EBITDA expectations to $197 million from $123 million, aided by an additional $20 per ton in cost savings. Looking ahead to 2026, Gibbs raised his EPS forecast to $0.42 and EBITDA to $1.86 billion, citing a stronger production base, contract repricing, and the elimination of a $250 million drag from the slab agreement with ArcelorMittal. If U.S. and Canadian steel prices outperform expectations, 2026 EBITDA could exceed $2 billion. According to Gibbs, valuation remains attractive, with shares trading at about 7x 2026 EV/EBITDA, within historical norms. The $14 price forecast reflects a multiple toward the higher end of that range, factoring in potential asset sales and upside from stronger steel pricing.
Business Insider
22-07-2025
- Business
- Business Insider
CLF Earnings: Cleveland-Cliffs Stock Rallies on Strong Q2 Beats
Cleveland-Cliffs (CLF) stock rallied Monday after the American steel company posted its Q2 2025 earnings report. It reported adjusted earnings per share of -50 cents, which was better than Wall Street's estimate of -71 cents. However, it was a negative switch year-over-year compared to 11 cents per share. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Cleveland-Cliffs reported revenue of $4.93 billion in Q2 2025, compared to analysts' estimate of $4.68 billion. Despite the beat, the company's revenue slipped 1.62% year-over-year from $5.09 billion. The company reported $323 million in non-recurring charges this quarter that were tied to its footprint optimization initiatives. CLF stock was up 4.54% in pre-market trading on Monday, following a 0.96% rally on Friday. The shares have also risen 0.85% year-to-date but were down 37.67% over the past 12 months. Cleveland-Cliffs Guidance Cleveland-Cliffs provided guidance for the full year of 2025 in its latest earnings report. The company expects the following: Capital expenditures of $600 million, compared to its previous outlook of $625 million. Selling, general, and administrative expenses of $575 million, compared to its prior guidance of $600 million. Steel unit cost reductions of $50 per net ton compared to 2024. Depreciation, depletion, and amortization of approximately $1.2 billion, compared to its previous guidance of $1.1 billion. Cash Pension and OPEB payments and contributions of $150 million. Lourenco Goncalves, Chairman, President and CEO, said, 'Our good cost performance in Q2 will be even further amplified into Q3 and Q4, with further expected improvements in adjusted EBITDA as a result.' Is Cleveland-Cliffs Stock a Buy, Sell, or Hold? Turning to Wall Street, the analysts' consensus rating for Cleveland-Cliffs is Hold, based on two Buy, five Hold, and a single Sell rating over the past three months. With that comes an average CLF stock price target of $8.27, representing a potential 12.76% downside for the shares. These ratings and price targets will likely change as analysts update their coverage after today's earnings.
Business Insider
22-07-2025
- Business
- Business Insider
Cleveland-Cliffs CEO: We're ready for the surge in automotive production
Lourenco Goncalves is speaking on CNBC's Mad Money. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>>
