Cleveland-Cliffs Stock Soars. Why Earnings Were a Relief.

Coming into Monday trading, Cleveland-Cliffs stock was up about 1% year to date and down about 38% over the past 12 months. (Sean Gallup/Getty Images)

Shares of steel maker Cleveland-Cliffs rose Monday after the company posted better-than-expected second-quarter earnings.

Cleveland-Cliffs reported earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $97 million and a per-share loss of 50 cents from sales of $4.9 billion. Wall Street was looking for an Ebitda loss of $35 million and a per-share loss of 71 cents from sales of $4.9 billion, according to FactSet.

Reported Ebitda was $323 million in the second quarter of 2024, partly because steel prices were higher. Cliffs’ average net selling price in the quarter was $1,015 per ton, down $110 from the second quarter of 2024. Cliffs shipped 4.3 million tons, up from 4 million in the second quarter of 2024.

“Our second-quarter results demonstrate that the footprint optimization initiatives announced a few months ago are already generating a positive impact on both costs and revenues,” said CEO Lourenco Goncalves in a news release. “Our good cost performance in Q2 will be even further amplified into Q3 and Q4, with further expected improvements in adjusted Ebitda as a result.”

Management still expects full-year costs per ton to drop about $50 compared with 2024. That “implies another [roughly] $25 per ton better in [the] second half,” wrote Citi analyst Alexander Hacking on Monday. He rates Cliffs stock Hold and has a $7.50 price target for shares.

Cost reductions should help results. Wall Street expects Ebitda of more than $500 million in the second half of 2025, up from a loss of $77 million in the first half.

Shares of the steel maker added 12.5% on Monday, closing at $10.66, while the S&P 500 rose 0.1% and the Dow Jones Industrial Average fell less than 0.1%.

Coming into Monday trading, Cliffs stock has risen about 1% this year and has declined about 38% over the past 12 months.

U.S. tariffs on imported steel have helped boost domestic prices for hot-rolled coil, a benchmark product, to about $875 per ton from levels at the start of the year that were closer to $600 per ton. Still, prices are below 2024 peak levels of about $1,100 a ton.

Write to Al Root at allen.root@dowjones.com