NYSE$CLF

Cleveland-Cliffs Inc · Q4 2019 earnings

Q4 2019 earnings · · Investor relations

Briefing

Cleveland-Cliffs' fourth-quarter results decreased compared to the previous year, but the company announced the acquisition of AK Steel.

Cleveland-Cliffs Inc. reported a net income of $63 million, or $0.23 per diluted share, for the fourth quarter of 2019. This includes $7 million in costs related to the acquisition of AK Steel. Consolidated revenues were $534 million, compared to $696 million in the prior-year quarter. Adjusted EBITDA was $111 million, compared to $188 million in the fourth quarter of 2018.

  • Net income for the fourth quarter was $63 million, or $0.23 per diluted share, including acquisition-related costs.
  • Consolidated revenues for the fourth quarter were $534 million, a decrease from $696 million in the prior-year quarter.
  • Adjusted EBITDA for the fourth quarter was $111 million, down from $188 million in the fourth quarter of 2018.
  • The company announced the acquisition of AK Steel, expected to close in the first quarter of 2020.

Headline financials

Total Revenue

$534M

Previous: $696M-23.3%
EPS (adj)

$0.25

Previous: $2.03-87.7%
Adjusted EBITDA

$111M

No prior period
Steel Shipments

5.8K

No prior period
Avg Selling Price

$90.79

Previous: $99.42-8.7%
Capital Expenditures

$191M

Previous: $4.2M+4450.0%
Free Cash Flow

-$16.7M

Previous: $286M-105.8%
Net Income

$63.2M

Previous: $610M-89.6%
Operating Income

$81.7M

Previous: $163M-49.9%
Gross Profit

$127M

Previous: $202M-37.2%
Cash & Equivalents

$353M

Previous: $823M-57.2%
Total Assets

$3.5B

Previous: $3.53B-0.7%

Revenue & EPS history

Cleveland-Cliffs · Revenue · Quarterly

$534M

Q4 2019-23.3%vs Q4 2018
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Cleveland-Cliffs · $5.87B total across 1 segment · Q3 2021

  • Steelmaking
    $5.87B

Forward guidance

Cliffs expects to generate approximately $300-325 million of net income and $550-575 million of Adjusted EBITDA for the full-year 2020 on a standalone basis, based on iron ore prices of $90 per metric ton, steel prices of $650 per short ton, and pellet premiums of $50 per metric ton.

Tailwinds

  • Iron ore prices of $90 per metric ton.
  • Steel prices of $650 per short ton.
  • Pellet premiums of $50 per metric ton.
  • Expects to receive approximately $60 million in cash tax refunds during the third quarter of 2020.
  • Becoming a leading supplier of the most sophisticated carbon and stainless steel products to high-end clients, including engineered parts to the automotive industry as a Tier 1 supplier to several different models of cars, SUVs and trucks.

Headwinds

  • $125 million in interest expense.
  • $25 million in tax expense (all non-cash).
  • $100 million in depreciation, depletion, and amortization.
  • 2020 capital spending expectation is $350-$400 million, including the remaining spend to complete the Toledo HBI production plant, sustaining capital, and capitalized interest.
  • The quarter's results were negatively impacted by an unfavorable true-up of previously sold volumes due to lower pellet premiums and HRC prices, as well as unfavorable customer mix.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2019

Historical avgQ4 2019

+0.8%

Avg return

Earnings day

-1.8%

Avg return

5 days after

-2.5%

Avg return

30 days after

55%

40 / 73 earnings

Positive

+23.1%

Q2 2018

Best reaction

-21.1%

Q4 2020

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026-4.6%+0.3%+10.0%
Q4 2025-16.4%-29.5%-37.0%
Q3 2025+21.4%-1.4%-15.5%
Q2 2025-0.7%-1.9%+9.9%
Q1 2025-15.9%-10.7%-10.5%
Q4 2024-3.2%-2.8%-16.3%
Q3 2024-12.5%-3.0%-6.3%
Q2 2024+4.7%+2.0%-15.4%
Q1 2024-10.9%-14.1%-17.6%
Q4 2023+9.3%+10.4%+10.2%
Q3 2023+7.3%+9.9%+15.5%
Q2 2023+9.9%+7.0%-5.1%
Q1 2023-3.8%-3.1%-10.6%
Q4 2022+2.4%-0.6%-11.4%
Q3 2022-5.0%-13.4%+2.4%
Q2 2022-3.4%-2.9%+3.8%
Q1 2022-6.2%-7.2%-26.3%
Q4 2021-11.8%-5.2%+23.4%
Q3 2021+20.1%+17.2%+3.7%
Q2 2021+1.9%+5.1%+8.5%
Q1 2021+5.5%+9.6%+5.9%
Q4 2020-21.1%-13.1%-2.0%
Q3 2020+3.0%-3.5%+11.6%
Q2 2020-10.8%-5.9%+11.5%
Q1 2020-8.9%-14.9%+36.7%
Q4 2019-6.7%-15.0%-58.0%
Q3 2019+0.1%+3.6%+11.2%
Q2 2019+3.1%+0.6%-24.9%
Q1 2019+6.1%+5.0%-2.1%
Q4 2018+6.9%+5.2%-10.3%
Q3 2018-1.2%-11.2%-10.3%
Q2 2018+23.1%+22.2%+11.5%
Q1 2018+1.0%+4.0%+19.7%
Q4 2017-8.6%-11.0%-10.3%
Q3 2017-8.3%-8.2%-17.6%
Q2 2017-8.2%-3.6%+1.2%
Q1 2017-6.5%-7.8%-14.6%
Q4 2016+17.1%+26.4%-8.2%
Q3 2016-12.4%-12.1%+59.8%
Q2 2016+0.8%+1.4%-26.5%
Q1 2016+22.3%
Q4 2015+4.6%
Q3 2015+4.5%
Q2 2015-10.8%
Q1 2015-11.7%
Q4 2014+5.9%
Q3 2014+17.2%
Q2 2014-0.8%
Q1 2014-1.6%
Q4 2013+5.3%
Q3 2013+6.7%
Q2 2013+7.7%
Q1 2013+21.0%
Q4 2012-19.6%
Q3 2012-12.3%
Q2 2012-9.6%
Q1 2012-4.3%
Q4 2011-2.9%
Q3 2011+2.5%
Q2 2011-4.0%
Q1 2011-0.2%
Q1 2009+3.9%
Q4 2010+3.9%
Q3 2010+4.7%
Q2 2010+4.5%
Q1 2010+1.5%
Q4 2007+13.1%
Q4 2009+13.1%
Q3 2009+1.7%
Q3 2008+1.7%
Q2 2008+10.2%
Q2 2009+10.2%
Q4 2008+10.2%

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