Cleveland-Cliffs reports Q1 EPS 18c, consensus 22c

Reports Q1 revenue $5.20B, consensus $5.35B. Cliffs’ Chairman, President and CEO Lourenco Goncalves said: “Our first quarter results were highlighted by the resiliency of automotive production in the United States, which helped to offset a temporary buyers strike from service centers in January and February. With more automotive and less service center business, first quarter mix was richer than originally anticipated, driving both our average selling prices and production costs higher than expected. In the first quarter, we returned capital to our shareholders at an aggressive rate. Our stock was cheap throughout the quarter and remains so, driving the exhaustion of our previous $1 billion share repurchase authorization and the commencement of another larger one. Buying our own stock is clearly a better use of capital than any M&A opportunities at current valuations — so that’s our primary focus. This quarter, our efforts towards green steel production were recognized in an unprecedented way. As a result of our strong track record with emissions reductions and labor relations, we became the largest intended recipient of federal grants toward decarbonization in the history of the United States. These investments will go toward two game-changing projects, not only with immense carbon reduction prospects, but also robust returns and manageable capital commitments. Looking forward, we expect to benefit in Q2 from the lower costs under our guidance, which we have maintained. Our largest end market, the automotive sector, is expected to remain strong. Orders from our service center customers have started to increase, with spot pricing also on the upswing. We are fortunate to have such a remarkable partnership with our workforce, and we will navigate this world of abundant opportunities together with our union partners.”