By Kelly Cloonan
Cleveland-Cliffs will pause or slow operations at plants after logging a wider loss and lower revenue in the first quarter.
The steelmaker on Wednesday said it is fully or partially idling six facilities between March and May, and cited the need to optimize its footprint and shift away from loss-making operations.
The company expects the actions to drive over $300 million in annual savings, not including additional savings in overhead and improved productivity at other locations.
Chief Executive Lourenco Goncalves said the operational changes are a result of negative impacts on results from underperforming non-core assets and the lagging effect of lower index prices in late 2024 and early 2025.
Goncalves said the company is repositioning its portfolio away from non-core markets including rail, high-carbon sheet, and specialty plate products, and toward the automotive industry.
The Trump administration has shown strong support for both the steel and auto industries, and the company has arranged higher volume commitment with its automotive customers as a result, Goncalves said.
For the first quarter, the company posted a loss of $495 million, or $1.00 a share, compared with a loss of $67 million, or 14 cents a share, a year earlier.
Adjusted losses per share were 92 cents, more than the estimate for an adjusted loss of 82 cents, according to analysts polled by FactSet.
Revenue fell to $4.63 billion compared with $5.2 billion a year ago. Analysts polled by FactSet expected $4.63 billion.
Steel shipments totaled 4.1 million net tons, up from 3.9 million a year ago.
For the full year, the company guided for steel-unit cost reductions of approximately $50 per net ton, up from previous guidance for $40 per net ton due to the operational changes. The company guided for capital expenditures of $625 million, down from prior guidance of about $700 million.
The stock fell 9% to $7.76 in after-hours trading. Shares have declined 51% over the past 12 months through Wednesday's market close.
Write to Kelly Cloonan at kelly.cloonan@wsj.com
(END) Dow Jones Newswires
May 07, 2025 17:54 ET (21:54 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.