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CLF NYSE· Cleveland-Cliffs Inc
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CLF NYSE· Cleveland-Cliffs Inc
Earnings report Q4 2023

CLF Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

CLF's total revenues for the latest quarter were $21.996 billion, representing a slight decrease compared to the previous year's revenue of $22.989 billion. The company's steelmaking segment generated revenues of $21.331 billion, showing a decline from the previous year's $22.383 billion. On the other hand, the other businesses segment reported revenues of $665 million, a slight increase from the previous year's $606 million.

Strengths

Despite the decrease in total revenues, CLF achieved several notable strengths in the latest quarter. The company reported a net income of $450 million and adjusted EBITDA of $1.9 billion, demonstrating solid profitability. CLF also achieved its third consecutive year of revenues over $20 billion, indicating consistent revenue generation. Additionally, the company significantly reduced its unit costs year-over-year, contributing to improved profitability. Management attributed the record steel shipments of 16.4 million net tons and record automotive shipments as key drivers of revenue growth.

Challenges

CLF faced challenges in the latest quarter, particularly in the steel producers market. The company experienced a decrease in revenues from this market, amounting to $516 million or 15%. This decline was primarily due to the decrease in pricing indices for slabs and busheling scrap. However, these challenges were partially offset by an increase in revenues from the direct automotive market, which saw a growth of $779 million or 12%. This increase was mainly driven by favorable renewals of annual fixed price contracts and an increase in shipments.

Noteworthy

CLF made significant progress in managing its debt and liquidity in the latest quarter. The company reduced its total outstanding long-term debt by $1.1 billion to $3.2 billion, reaching its lowest net debt level since becoming a steel company. CLF also achieved a record liquidity of $4.5 billion, indicating a strong financial position. Additionally, the company repurchased a significant amount of its outstanding convertible senior notes and industrial revenue bonds, resulting in a net gain on extinguishment.

Summary

CLF delivered a strong performance in terms of revenue in the latest quarter, despite facing challenges in the steel producers market. The company's steelmaking segment experienced a decline in revenues, while the other businesses segment showed slight growth. CLF's strengths include solid profitability, record steel and automotive shipments, and effective cost management. The company's efforts in reducing debt and improving liquidity are noteworthy. Overall, CLF's ability to consistently generate revenues over $20 billion and its focus on cost reduction position it well for future growth.

Source documents

Form 10-K  filed on Feb 08, 2024
123 pages scanned

Reference data

Company financials Q4 revenue 5.11B
Analyst estimates Q4 EPS missed by -7.61%
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