Cleveland-Cliffs (CLF) to Post Q1 Earnings: Factors At Play
Zacks Equity Research
April 20, 2022, 8:24 am
Cleveland-Cliffs Inc. CLF is slated to release first-quarter 2022 results before the opening bell on Apr 22.
The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters, while missed twice. It has a trailing four-quarter negative earnings surprise of roughly 0.8%, on average. The company posted a negative earnings surprise of around 12.3% in the last reported quarter. Benefits of higher year-over-year steel prices and contributions of AK Steel and ArcelorMittal USA acquisitions are likely to get reflected on the company’s first-quarter performance.
The stock has rallied 84.4% in a year’s time compared with the industry’s 9.5% rise.
Let’s see how things are shaping up for the upcoming announcement.
Zacks Model
Our proven model predicts an earnings beat for Cleveland-Cliffs this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earning beat.
Earnings ESP: Earnings ESP for Cleveland-Cliffs is +8.85%. The Zacks Consensus Estimate for the first quarter is currently pegged at $1.51. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cleveland-Cliffs currently carries a Zacks Rank #1.
What do the Estimates Say?
The Zacks Consensus Estimate for first-quarter consolidated revenues for Cleveland-Cliffs is currently pegged at $5,527 million, which calls for a rise of 36.5% year over year.
Some Factors to Watch For
Cleveland-Cliffs is expected to have gained from its acquisitions of AK Steel and ArcelorMittal USA, which might have had a positive impact on its first-quarter revenues and earnings. It is also expected to have benefited from a rebound in end-market demand for steel, especially in automotive.
Higher year-over-year steel prices are also likely to have aided the company’s performance in the March quarter. U.S. steel prices witnessed a significant rally in 2021 supported by strong underlying supply and demand fundamentals. However, prices came under pressure since the beginning of the fourth quarter of 2021, partly due to rising production levels.
The benchmark hot-rolled coil (“HRC”) prices started to retreat since October after peaking in September 2021, pulled down by shorter lead times and higher supply. Prices tumbled to nearly $1,000 per short ton at the beginning of March 2022. However, HRC prices started to recover since then amid the supply concerns stemming from Russia's invasion of Ukraine along with extending lead times. Prices have rebounded to above $1,400 per short ton.
Higher domestic steel prices are likely to have boosted Cleveland-Cliffs’ margins in the quarter to be reported. It is likely to have gained from higher year-over-year average steel selling prices.
ClevelandCliffs Inc. Price and EPS Surprise
ClevelandCliffs Inc. Price and EPS Surprise
ClevelandCliffs Inc. price-eps-surprise | ClevelandCliffs Inc. Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider as our model shows these too have the right combination of elements to post an earnings beat this quarter:
Dow Inc. DOW, scheduled to release earnings on Apr 21, has an Earnings ESP of +5.45% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Dow’s first-quarter earnings has been revised 5.2% upward over the past 60 days. The Zacks Consensus Estimate for DOW’s earnings for the quarter is currently pegged at $2.02.
The Mosaic Company MOS, scheduled to release earnings on May 2, has an Earnings ESP of +0.89% and carries a Zacks Rank #1.
The Zacks Consensus Estimate for Mosaic’s first-quarter earnings has been revised 14.6% upward over the past 60 days. The Zacks Consensus Estimate for MOS’s earnings for the quarter is currently pegged at $2.44.
Westlake Corporation WLK, expected to release earnings on May 3, has an Earnings ESP of +12.08% and carries a Zacks Rank #1.
The Zacks Consensus Estimate for Westlake's first-quarter earnings has been revised 22.1% upward over the past 60 days. The consensus estimate for WLK’s earnings for the quarter is currently pegged at $4.53.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Westlake Corp. (WLK) : Free Stock Analysis Report
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The Mosaic Company (MOS) : Free Stock Analysis Report
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