Al Root
Cleveland-Cliffs stock tanked after a shocking quarterly earnings report.
President Donald Trump's steel and aluminum tariffs were supposed to help. It hasn't happened yet.
Shares of American steel maker Cleveland-Cliffs were down 17.4% in early trading at $7.02, while the S&P 500 and Dow Jones Industrial Average were up about 0.4%.
Wednesday evening, Cleveland-Cliffs announced an adjusted Ebitda loss of $174 million. Ebitda is short for earnings before interest, deprecation, and amortization. Wall Street was looking for a loss of about $100 million, according to FactSet.
Beyond the loss, Cleveland-Cliffs is idling facilities, and cutting hours at others to "optimize its footprint, reposition away from loss-making operations, and release excess working capital," reads part of a news release. Two iron mines in Minnesota, a blast furnace, an oxygen furnace, and a steel caster in Michigan are being idled. Two operations in Pennsylvania and an Illinois mill also face reduced output. Capital spending on a West Virginia project has also been halted.
"Our first-quarter results were negatively impacted by underperforming non-core assets and the lagging effect of lower index prices in late 2024 and early 2025," said CEO Lourenco Goncalves in a news release. "As a result, we are taking decisive action to streamline our operations and enhance efficiency."
Benchmark steel prices started the year at about $650 a metric ton, down from closer to $900 at the start of 2024. Prices rose after President Trump placed 25% import tariffs on steel and aluminum. Currently, they are at about $880 per ton, but it wasn't enough to help the first quarter results at Cleveland-Cliffs.
Cleveland-Cliffs' management didn't call out tariff policies when talking about plant idling. Far from it. They praised President Trump's efforts to bring manufacturing back to the U.S. That process, however, is a long one.
For now, the outlook isn't looking good.
Coming into Thursday trading, Cleveland-Cliffs stock was down 10% year to date, and down 27% since the Nov. 5 election.
Write to Al Root at allen.root@dowjones.com
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May 08, 2025 10:57 ET (14:57 GMT)
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