Cleveland-Cliffs reports profits on April 22nd
Cleveland-Cliffs Inc. (NYSE: CLF) is an Ohio-based company specializing in the mining, processing, and pelletizing of iron ore and steel manufacture including punches and tools. It is the largest flat steel producer in North America. They are also the largest manufacturer of iron ore pellets in North America. In 2020 Cleveland-Cliffs acquired two major steel manufacturers, AK Steel and ArcelorMittal USA. The company employs approximately 25,000 people in the mining, steel, and downstream manufacturing sectors in the United States and Canada.
March 30th, Cleveland-Cliffs announced that it will report earnings for the first quarter before the market opens on Thursday April 22nd. It was 50/50 on the winning record last year, with Cleveland-Cliffs beating expectations twice from its four most recent reports.
For the first quarter of 2020 Cleveland cliffs missed analysts’ estimates by a margin of $ 0.03 and reported earnings per share of – $ 0.19. For the second quarter of 2020, CLF cut its earnings per share to – USD 0.28 and was still able to significantly exceed expectations by USD 0.22. For the third quarter of 2020 Cleveland cliffs Earnings rose and rose to – $ 0.03 per share. CLF also beat estimates by $ 0.06. In its final quarter, Cleveland-Cliffs reported earnings per share of $ 0.04 and fell short of expectations with a margin of $ 0.18.
CLF stock price nearly quadrupled year over year, rising 446% after bottoming at a 52-week low of $ 3.30. In addition, Cleveland-Cliff’s shares are up 25.5% year-to-date.
From a fundamental perspective, Cleveland-Cliffs is as much of a mixed bag as you can find. On the negative side, CLF lacks consistency and certainty in both the balance sheet and the income statement. Currently, the company has massive $ 5.99 billion in debt, far outweighing its cash balance of $ 112 million. Cleveland-Cliffs has also lost well over $ 1.2 billion in net income since fiscal 2018 and posted a net loss of $ 122 million for fiscal 2020.
On the positive side, however, the company increased sales by an outstanding 169% in fiscal 2020, for total sales of up to $ 5.35 million. Cleveland-Cliffs stock also has an exceptional price / earnings ratio of 4.79, despite the fact that the company is currently unprofitable. Cleveland Cliffs stock, however, has the potential of a speculative turn-around game for less risk-averse investors.
Regardless, shorts hit the exits. Short rates fell 14.8% over the last two reporting periods, but still account for a whopping 16% of the stock’s total available free float. At CLF’s average daily trading pace, short sellers would take less than three days to buy back their bearish bets.