Cleveland-Cliffs Set to Report Earnings Amid Market Challenges

Cleveland-Cliffs (NYSE:CLF) is scheduled to report its earnings on May 7, 2025. Analysts estimate revenues will reach $5.2 billion. However, consensus estimates predict a loss of $0.83 per share. This expected decline stems from falling steel prices and reduced demand in key sectors, such as automotive and construction. Currently, U.S. hot-rolled coil (HRC) prices have decreased to approximately $665 per ton. The combination of decreasing prices, increasing inventory, and shortened lead times indicates a softening market that may negatively affect Cleveland-Cliffs’ revenue and profitability.

Company Performance Overview

Cleveland-Cliffs currently has a market capitalization of $4.0 billion. Over the past twelve months, the company reported revenues of $19 billion, but it has faced operational struggles with $504 million in operating losses and a net income loss of $754 million. Investors looking for alternatives with lower volatility may consider the Trefis High Quality portfolio, which has outperformed the S&P 500, showing returns exceeding 91% since its inception.

Historical Earnings Data

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Cleveland-Cliffs’ Historical Odds Of Positive Post-earnings Return

Reviewing the one-day (1D) post-earnings returns provides the following insights:

• In the last five years, there have been 19 recorded earnings data points, with 10 positive and 9 negative returns, resulting in a 53% occurrence rate of positive returns.
• This likelihood improves to 55% when analyzing the last three years.
• The median of the 10 positive returns stands at 5.7%, while the median of the 9 negative returns is -7.9%.

Return Correlation Analysis

Additional data on observed 5-day (5D) and 21-day (21D) returns post-earnings can be found in the table below.

Correlation Between 1D, 5D, and 21D Historical Returns

Understanding the correlation between short-term and medium-term returns post-earnings can inform trading strategies. If 1D and 5D returns show a strong correlation, traders might consider a long position based on positive 1D returns. Correlation data for both 5-year and 3-year periods is available, with 1D_5D signaling the link between 1D and subsequent 5D returns.

Impact of Peer Earnings

Peer performance can influence the stock reaction following earnings announcements. Market participants may begin to price in effects before the official earnings are released. Historical comparisons show Cleveland-Cliffs’ stock performance relative to peers that announced earnings just before it. For consistency, peer stock returns also reflect post-earnings one-day (1D) returns.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.