Cleveland-Cliffs to Report Q1 Earnings: What's in Store?

Cleveland-Cliffs Inc. CLF is slated to release first-quarter 2024 results after the closing bell on Apr 22.
The company beat the Zacks Consensus Estimate for earnings in three of the last four quarters, while posted in-line result once. It has a trailing four-quarter earnings surprise of roughly 24.7%, on average. Cleveland-Cliffs is likely to have gained from healthy overall volumes, higher selling prices and lower steelmaking unit costs in the first quarter.
The stock has gained 22.4% in a year's time compared with the industry's 2.4% rise.

Let's see how things are shaping up for the upcoming announcement.

Zacks Model

Our proven model predicts an earnings beat for Cleveland-Cliffs this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Cleveland-Cliffs is +12.00%. The Zacks Consensus Estimate for the first quarter is currently pegged at 19 cents.
Zacks Rank: Cleveland-Cliffs currently carries a Zacks Rank #3.

What do the Estimates Say?

The Zacks Consensus Estimate for first-quarter consolidated revenues for Cleveland-Cliffs is currently pegged at $5,306.8 million, which suggests a year-over-year rise of 0.2%.

Some Factors to Watch For

The company is likely to have witnessed higher sales volumes in the first quarter. Healthy overall demand in its end markets, especially in automotive, is likely to have supported its total volumes in the quarter. Our estimate for external sales volumes for steel products stands at 4.084 million net tons, suggesting a 1.1% sequential rise.
Cleveland-Cliffs is also expected to have benefited from actions to lower unit costs. Lower steelmaking unit costs are likely to have supported margins in the first quarter. CLF expects steel unit costs to decline by roughly $30 per ton in 2024.
Meanwhile, U.S. steel prices rebounded in late 2023 with the benchmark hot-rolled coil prices breaking above $1,000 per short ton in December, driven by U.S. steel mills' price hike actions, supply tightness and a recovery in demand. The recovery is also being supported by the resolution to the United Auto Workers (UAW) strike. Notably, the UAW reached a deal with the Detroit Big Three in November 2023, ending the roughly six-week strike that weighed on the U.S. steel industry due to a slowdown in automotive demand. However, HRC prices have come under pressure of late on a pullback in steel mill lead times.
Nevertheless, sequentially higher average selling prices are likely to have aided the company's performance in the quarter to be reported.

Cleveland-Cliffs Inc. Price and EPS Surprise

Cleveland-Cliffs Inc. price-eps-surprise | Cleveland-Cliffs Inc. Quote

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Agnico Eagle Mines Limited AEM, scheduled to release earnings on Apr 25, has an Earnings ESP of +5.02% and carries a Zacks Rank #3.
The consensus estimate for AEM's earnings for the first quarter is currently pegged at 55 cents per share.
Dow Inc. DOW, slated to release earnings on Apr 25, has an Earnings ESP of +2.28% and carries a Zacks Rank #3 at present.
The consensus mark for DOW's first-quarter earnings is currently pegged at 47 cents.
Nucor Corporation NUE, scheduled to release first-quarter earnings on Apr 22, has an Earnings ESP of +0.64%.
The Zacks Consensus Estimate for NUE's earnings for the first quarter is currently pegged at $3.62. NUE currently carries a Zacks Rank #3.
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