Shares of Cleveland-Cliffs Inc. (CLF) were trading lower on Monday after the steelmaker delivered a classic mixed bag of first-quarter results for 2026. The headline numbers tell a story of resilience meeting a very expensive cold snap.
Let's break it down. The company reported an adjusted loss of 40 cents per share. That just missed the analyst consensus estimate, which was calling for a loss of 39 cents. So, a miss, but by a hair. On the top line, however, things looked better. Revenue came in at $4.92 billion, comfortably beating the estimate of $4.78 billion.
Digging into the operations, steel product sales volumes were roughly flat year-over-year at 4.1 million net tons. The money those tons brought in, however, was up—steelmaking revenues hit $4.8 billion, compared to $4.5 billion in the first quarter of 2025. The more telling figure might be adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). It landed at $95 million, a significant swing from a loss of $179 million in the prior-year period. But here's the kicker: that $95 million figure includes an $80 million one-time hit. The culprit? Extreme cold weather that drove up energy costs. Mother Nature, it seems, sent the company an $80 million bill.
On the balance sheet, total liquidity stood at a healthy $3.1 billion as of March 31.
What the Boss Says
Chairman, President and CEO Lourenco Goncalves framed the quarter as one of managing short-term headaches. "First-quarter results reflected short-term headwinds including energy prices and price realization lags," he said.
But he was decidedly upbeat about the road ahead. "As we move through the year, each quarter is expected to improve sequentially, as the momentum already visible in both our order book and pricing continues to translate into earnings and cash flow," Goncalves explained. He then put a clear marker down: "Importantly, we expect to generate healthy positive free cash flow in the second quarter, marking a return to the earnings and cash-generation profile this company is capable of delivering."
Goncalves also touched on the company's strategic dance with potential partners. He suggested that geopolitical instability has, ironically, been good for business, strengthening Cleveland-Cliffs' competitive position and piquing interest from other global steel producers. Specifically on the long-discussed potential deal with South Korea's POSCO, he noted, "While the current situation has not helped the timeline of a potential deal with POSCO, we continue to negotiate in good faith within the framework of our MoU toward a transaction that is accretive for our shareholders."
Looking at the Rest of 2026
The company isn't changing its tune for the full year. It reiterated its outlook for steel shipment volumes of approximately 16.5 million to 17.0 million net tons and capital expenditures of about $700 million.
On the earnings call, Goncalves elaborated on the global landscape. He pointed to the conflict in Iran as a source of disruption for global metal supply chains. Despite that pressure, he said Cleveland-Cliffs is running at full capacity with its order book full.
The company is also looking at new frontiers. Goncalves said they're evaluating opportunities in the rare earth sector, though they don't plan to get into the refinement stage. More imminently, they're working to weave artificial intelligence into their production logistics, with an update on those projects expected soon. A company executive added that market conditions in South Korea and across Asia have become "significantly more complex" in recent years.
For the immediate future, Cleveland-Cliffs expects the market patterns from the first quarter to continue into the second, with selling prices anticipated to increase and performance in the Canadian market expected to improve.
Despite the confident outlook from management, the market's initial reaction was a shrug. Cleveland-Cliffs shares were down 1.96% at $9.74 at the time of publication on Monday.
