10-Q: Cleveland-Cliffs Q1 2026 Financial Results

Cleveland-Cliffs reported a net loss of $237 million for Q1 2026, showing improvement from the $498 million loss in the same period last year.

Summary

• Revenue for the first quarter of 2026 was $4.922 billion, up from $4.629 billion in Q1 2025.
• Net loss attributable to Cliffs shareholders was $237 million, compared to a $498 million loss in Q1 2025.
• Operating loss was $213 million, significantly improved from the $543 million operating loss in Q1 2025.
• Adjusted EBITDA was $95 million, compared to a negative $179 million in the prior-year period.
• Steel shipments totaled 4.108 million net tons, a slight decrease from 4.140 million net tons in Q1 2025.
• Average selling price per net ton of steel was $1,048, up from $980 in Q1 2025.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a neutral-to-positive report, as the company shows clear operational improvements and margin expansion despite ongoing net losses and industry headwinds.

Positives

• Revenue increased by 6% year-over-year to $4.922 billion.
• Average selling price per net ton of steel increased by 7% to $1,048.
• Adjusted EBITDA improved to $95 million from a loss of $179 million in Q1 2025.
• Successful conclusion of an unprofitable ArcelorMittal USA slab contract, allowing for a shift to higher-margin business.
• Strong liquidity position with $3.1 billion in total liquidity as of March 31, 2026.

Negatives

• Reported a net loss of $237 million for the quarter.
• Steel shipments decreased by 1% year-over-year.
• Operating loss of $213 million persists.
• Elevated utility costs, particularly natural gas, impacted unit costs during the quarter.
• Cash used by operating activities was $325 million.

Risks

• Volatility in steel, scrap metal, and iron ore market prices.
• Reliance on the cyclical automotive industry for demand.
• Geopolitical tensions, including the war with Iran, impacting global supply chains and freight rates.
• Potential for future impairment charges related to idled or closed facilities.
• Regulatory and environmental compliance costs, including potential financial assurance requirements.

Future Outlook

The company expects domestic steel demand to grow, supported by Section 232 tariffs and reduced import attractiveness. Management anticipates total cash used for capital expenditures during the next 12 months to be approximately $800 million. The company continues to explore strategic partnerships and non-core asset sales to reduce debt.

Management Comments

• Management believes steel tariffs play a crucial role in protecting the U.S. economy and industrial base.
• The company expects to benefit from the Trump administration's pro-manufacturing agenda.
• Management views the electrical steel business as critical for the modernization of the electrical grid and AI-driven electricity demand.
• The company remains committed to achieving its GHG emissions reduction targets.

Industry Context

StockSavvy.ai notes that Cleveland-Cliffs is navigating a challenging domestic steel market characterized by high input costs and cyclical demand. The company's focus on vertical integration and automotive-grade steel provides a competitive moat, though it remains sensitive to trade policy and global geopolitical tensions.

Comparison to Industry Standards

• The company's integrated blast furnace footprint is contrasted with competitors relying heavily on EAF facilities and imported metallics.
• The company maintains a leading position in automotive-grade steel compared to other domestic producers.
• The company's Scope 1 and 2 emissions intensity is reported to be significantly lower than the global industry average.

Legal Proceedings

• The company is party to various claims and legal proceedings incidental to operations, including environmental matters, but does not believe these will have a material adverse effect.

Related Party Transactions

• The company has ongoing transactions with SunCoke Middletown, a consolidated variable interest entity.

Stakeholder Impact

• Shareholders may benefit from potential debt reduction through asset sales and improved margins.
• Employees are impacted by ongoing footprint optimization and idling of facilities.
• Customers in the automotive sector remain a primary focus for high-end steel supply.

Next Steps

• Continue optimization of the steelmaking footprint, including idling specific plate finishing lines in Q2 2026.
• Continue exploration of strategic partnership with POSCO.
• Continue sell-side processes for non-core operating assets.
• Conduct additional technical and economic studies for potential rare earth extraction.

Key Dates

Recommendation

The company is showing signs of operational recovery and margin improvement, but remains in a net loss position with significant debt and exposure to cyclical industry risks, warranting a cautious hold approach.

Keywords

Cleveland-Cliffs, Steel, Iron Ore, Automotive Steel, 10-Q, Financial Results, CLF