Cleveland-Cliffs Posts $165 Million Q3 Profit, Guides to $715 Million Q4 EBITDA and Flags $4 Billion 2027 Target

Cleveland-Cliffs Inc. (NYSE: CLF) reported third-quarter net income of $165 million as steel shipments and prices climbed and unit costs fell faster than management had guided. The company also issued a fourth-quarter adjusted EBITDA outlook of approximately $715 million and pointed to a path toward more than $4 billion of adjusted EBITDA in 2027, according to its third-quarter earnings release and reporting on the earnings call.

Third-Quarter Results: Profit Returns as Volumes and Prices Climb

Adjusted EBITDA more than doubled sequentially to $612 million, ahead of the roughly $601 million Wall Street had expected, even as revenue of about $5.6 billion came in below the roughly $5.72 billion analysts had projected, according to data compiled by Stocktwits and StockAnalysis.com. Adjusted earnings per share of $0.28 beat the Fiscal AI estimate of $0.24, while GAAP EPS came in at $0.26 on net income of $165 million.

Steel shipments rose to 4.2 million net tons from 4.0 million a year earlier, and the average net selling price climbed $53 sequentially to $1,177 per net ton, up from $1,032 a year earlier, Stocktwits and MarketBeat's summary of the earnings call reported. Management attributed the sequential improvement to higher shipments, stronger selling prices and lower unit costs, with per-ton costs falling $17 in the quarter, more than the $10 reduction it had previously guided to.

Not all of the volume gain came from core steelmaking demand. According to an analysis of the release by Finsee, shipments of 4.15 million tons — the figure the company rounded to 4.2 million net tons — still landed below the 4.3 million tons that Chairman, President and CEO Lourenco Goncalves had told investors to expect in July, and the additional tons went to distributors and converters, dealers that buy steel to resell; their share of steelmaking revenue rose to 34% from 28% a year earlier.

Fourth-Quarter Outlook: $715 Million Adjusted EBITDA

Cleveland-Cliffs guided to fourth-quarter adjusted EBITDA of approximately $715 million. The company said increased pricing is expected to support results, partly offset by seasonality, increased maintenance outages, input costs and incentive compensation accruals, per Stocktwits and MarketBeat's reporting of the call.

Betting on Contract Renewals for a $4 Billion 2027

For 2027, the company said it expects adjusted EBITDA to exceed $4 billion, based on new customer contracts and prevailing index-price forecasts, Stocktwits reported. Management said it sees a path to average more than $1 billion of adjusted EBITDA per quarter in 2027 under prevailing market conditions, a level CFO Celso Goncalves said would make it Cliffs' strongest year since 2021, according to MarketBeat's summary of the earnings call.

The outlook leans heavily on contract repricing rather than new assets. Lourenco Goncalves said the company has already renewed more than half of its 2027 contracts with service centers and end users, with the process expected to be substantially complete by Thanksgiving, and that nearly all customers are seeking more contracted steel volume for 2027 than in 2026. Management said the aggregate improvement from these renewals is expected to generate more than $1 billion in year-over-year EBITDA improvement before any change in underlying steel pricing indexes. The company also cited stronger fixed-price contract resets, lower discounts on index-linked contracts, continued pricing momentum, a larger expected contribution from Stelco as its backlog converts into shipments, and 2027 coal contracts concluded at rollover pricing as supports for the target.

Debt Still High Despite a "Major" Reduction Pledge

Cleveland-Cliffs reported total liquidity of $3.2 billion as of September 30, Stocktwits reported. CFO Celso Goncalves said the company is increasingly confident it can reduce leverage below its 2.5-times net debt-to-EBITDA target by the middle of 2027, and that debt reduction will remain the primary use of free cash flow even after reaching that threshold, with the asset-based lending facility as an initial repayment focus, according to MarketBeat's summary of the call. Goncalves was quoted by Stocktwits as saying: "We continued to reduce debt in Q3 and, with amplified free cash flow in Q4 and property sale proceeds, we expect a major debt reduction in the fourth quarter."

Progress in the third quarter itself was limited. Finsee's analysis of the filings found long-term debt of $7.6 billion against $77 million of cash, with debt down just $58 million for the quarter. Free cash flow came in at $72 million as receivables and inventories absorbed cash while sales grew, and of roughly $500 million in agreed property sales, only $130 million has been received so far. Asked whether the company would raise equity, Lourenco Goncalves said it does not intend to issue stock, and Celso Goncalves said management prefers to use cash from operations to reduce debt, per MarketBeat's call summary; Finsee noted that Cliffs has not repurchased shares since 2024 and its $1.4 billion buyback authorization remains unused.

Stelco Galvanizing Lines Idled, Middletown Modernization Rescoped

Separately, Cleveland-Cliffs said it will indefinitely idle the galvanizing lines at its Stelco operations in Canada because of an oversupplied galvanized steel market. Goncalves said the company made the decision because it had not seen, and did not anticipate, action to address the market imbalance. The company said it will shift Stelco's output toward hot-rolled products while maintaining the operation's total production tonnage, preserving approximately 2,000 Canadian jobs. The move follows the Canadian government's threat last week of legal action, including a potential forced sale of Canadian assets, over earlier plans to lay off hundreds of workers at Stelco, according to CNBC.

The company also said it completed the re-scoping of its $1 billion Middletown Works modernization in Ohio, which includes $500 million of Department of Energy support alongside a blast furnace rebuild, material-handling improvements, AI-enabled process controls and a cogeneration facility, with completion targeted for the first quarter of 2030 while production continues. Management also cited a coke plant rebuild at Burns Harbor, a blast furnace stove rebuild at Stelco, and an expansion at Butler Works in Pennsylvania that Goncalves said will add 25% of new capacity for grain-oriented electrical steel.

Stock Context

Shares had been drifting lower heading into the report. Closing prices tracked by Yahoo Finance show CLF at $12.98 on October 9, falling to $12.12 by October 16, a decline of 6.6% over that stretch by our calculation ((12.12 minus 12.98) divided by 12.98, multiplied by 100). That price history predates the October 19 earnings release, so it reflects pre-earnings positioning rather than the market's reaction to the results themselves. Stocktwits characterized the post-earnings share move as positive, though the underlying trading data available for this report does not extend to that session.

Bottom Line

Cleveland-Cliffs returned a third-quarter profit on better pricing, higher shipments and cost cuts that outpaced its own guidance, and it is now projecting a substantially larger 2027 built mostly on contract renewals rather than new production capacity. But the quarter's cash generation was modest relative to the $7.6 billion long-term debt load Finsee identified in the filings, and the "major" fourth-quarter deleveraging management has promised remains a forward commitment rather than a reported result. Investors weighing the 2027 target will likely watch how quickly the remaining contract renewals close, how much of the roughly $500 million in agreed property-sale proceeds actually arrives, and whether fourth-quarter free cash flow matches management's own description of it as "amplified."