Cleveland-Cliffs posts $165 million third-quarter profit; stock rallied over 10% in pre-market

Cleveland-Cliffs Inc. (CLF) said Monday it earned $165 million, or 26 cents per diluted share, in the third quarter of 2026, compared with a net loss of $234 million a year earlier. The steelmaker’s stock gained over 10% in pre-market on Monday.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization with certain items excluded, reached $612 million, up from $143 million a year earlier.

The results were released in a news release attached to a Form 8-K filed with the Securities and Exchange Commission, the company said in a regulatory filing.

Here's how the company did:

• GAAP net income: $165 million, or 26 cents per diluted share, vs. a net loss of $234 million, or 51 cents per share, a year earlier
• Adjusted net income: 28 cents per diluted share, vs. an adjusted net loss of 45 cents a year earlier
• Revenue: $5.6 billion vs. $4.7 billion a year earlier
• Adjusted EBITDA: $612 million vs. $143 million a year earlier

Revenue was up from $5.2 billion in the second quarter of 2026, when the company posted a GAAP net loss of $134 million, or 25 cents per diluted share.

Adjusted EBITDA improved $326 million from $286 million in the second quarter.

Chairman and CEO Lourenco Goncalves said the period was a strong one for the company. “Third quarter was our strongest quarter in three years, with adjusted EBITDA of $612 million, a number above the $575 million guidance we provided three months ago,” Goncalves said. “Average selling price, sales volumes, and unit costs all moved in the right direction relative to Q2 performance.”

The company expects fourth-quarter 2026 adjusted EBITDA of approximately $715 million, an increase from the third quarter as a result of increased pricing. That gain is partly offset by seasonality, increased maintenance outages, input costs and incentive compensation accruals, it said.

Goncalves said the company continued to reduce debt in the third quarter. He said “we expect a major debt reduction in the fourth quarter,” citing higher free cash flow and property sale proceeds. The company remains on track to reach its leverage target of under 2.5x net debt to EBITDA by the middle of next year. The release did not give a figure for the fourth-quarter debt reduction.

Based on 2027 contract changes and prevailing price forecasts, the company would expect 2027 adjusted EBITDA to exceed $4 billion. Goncalves said “our 2027 outlook has improved materially since our last earnings call.”

“The trade environment continues to support a healthy American steel industry,” Goncalves said. “Imports remain well below historical levels, lead times are extended, and our customers increasingly recognize the value of a reliable domestic supply chain.”

The steelmaking segment reported revenues of $5.4 billion, up from $4.6 billion a year earlier, and a gross margin of $454 million, compared with a loss of $56 million.

Average net selling price was $1,177 per net ton, up from $1,032 a year earlier. Steel product sales volumes were 4.2 million net tons, up from 4.0 million a year earlier.

Third-quarter steel product sales were 46% hot-rolled, 31% coated, 15% cold-rolled, 4% plate, and 4% stainless and electrical.

Steelmaking revenue included $1.8 billion, or 34%, from distributors and converters. Direct sales to the automotive market were $1.5 billion, or 28%. Sales to the infrastructure and manufacturing market were $1.5 billion, or 28%. Sales to steel producers were $532 million, or 10%.

Goncalves said Stelco had its strongest quarter since Cliffs acquired the company two years ago. He said the Canadian hot-rolled market improved substantially, making Stelco a positive contributor to EBITDA in the third quarter.

Goncalves said the company “made the difficult but necessary decision to indefinitely idle our galvanizing lines at Stelco,” citing an oversupplied Canadian market for galvanized steel.

Affected employees will be brought back to work as soon as the situation improves. Total production tonnage at Stelco will be maintained, and about 2,000 Canadian jobs are preserved, the company said.

The company had $3.2 billion in total liquidity as of Sept. 30, 2026, and $77 million in cash and cash equivalents.

Operating cash flow was $224 million in the quarter, compared with a $143 million outflow a year earlier. Purchases of property, plant and equipment were $152 million.

Long-term debt was $7.6 billion at Sept. 30, up from $7.3 billion at Dec. 31, 2025.

For the first nine months of 2026, revenue was $15.8 billion, up from $14.3 billion. Adjusted EBITDA was $993 million, compared with $58 million a year earlier.

The company reported a net loss attributable to Cliffs shareholders of $230 million for the nine months, compared with a loss of $1.2 billion a year earlier.

Selling, general and administrative expenses were $153 million, up from $130 million a year earlier. Restructuring and other charges were $1 million, compared with $3 million.

The company employs approximately 25,000 people across its operations in the United States and Canada.

The release did not give a figure for the 2027 outlook beyond the $4 billion level, or for the amount of the expected fourth-quarter debt reduction.