Shares of Cleveland-Cliffs (CLF) gained in after-hours trading after the steelmaker reported earnings for its second quarter of Fiscal Year 2024. Earnings per share came in at $0.11, which was above analysts’ consensus estimate of -$0.01. Sales decreased by 14.9% year-over-year, with revenue hitting $5.09 billion. This missed analysts’ expectations of $5.187 billion.
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For the quarter, the company reported steel shipments totaling four million net tons. It also posted an adjusted EBITDA of $323 million, which was a year-over-year decrease from $414 million. Furthermore, Cleveland-Cliffs bought back 7.5 million shares worth $125 million.
The steelmaker regularly buys back its shares, as shown in the image below. Interestingly, we can see that the amount repurchased varies significantly from quarter-to-quarter. This suggests that the firm is opportunistic with its buybacks, which makes sense since the steel industry tends to be very cyclical.
Looking forward, management is forecasting a $30 per net ton reduction in steel unit costs for 2024. Additionally, Cliffs expects its capital expenditures to be between $650 million and $700 million, a decrease from the previous $675 million to $725 million outlook.
Is CLF Stock a Buy or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on CLF stock based on two Buys, six Holds, and one Sell assigned in the past three months. After a 19% decline in its share price over the past three months, the average CLF price target of $18.30 per share implies 20.95% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
