Cleveland-Cliffs slumps after quarterly revenue misses estimates

By Aatreyee Dasgupta and Anshuman Tripathy

Feb 9 (Reuters) - Cleveland-Cliffs CLF.N shares tumbled over 17% on Monday afternoon, after the steelmaker's fourth-quarter revenue came in below Wall Street estimates.

The company's shares were trading down at $12.22, and were on pace for their biggest single-day drop since October 21.

CEO Lourenco Goncalves said Cleveland-Cliffs' performance in 2025 was affected by weak production levels in the automotive sector, the termination of a 5-year slab supply contract with ArcelorMittal MT.LU and the impact from the Trump administration's sweeping metal tariffs on the company's Canadian operations.

"Canada became a dumping ground for producers trying to avoid US tariffs, and downstream Canadian manufacturing was negatively impacted as well," Goncalves said.

Despite the tariffs bolstering U.S. steel spot prices, commercial contracts have lagged, as the industry adjusted to an older pricing index, resulting in lower selling prices during the fourth quarter.

The tariffs further hurt sales in the automotive sector, comprising 28% of Cleveland-Cliffs' quarterly steelmaking revenue, as the bottom line of U.S. automakers take a hit from higher costs of production.

The company's quarterly revenue marginally decreased to $4.31 billion from a year ago, below analysts' expectations of $4.59 billion, according to data compiled by LSEG.

Its 2025 total revenue also fell to $18.61 billion from $19.19 billion in 2024.

The steel producer, however, posted a narrower-than-expected quarterly loss.

Its adjusted loss was 43 cents per share in the quarter ended December 31, compared with 68 cents a year ago. Analysts on average had expected a loss of 60 cents.

Goncalves said the company is expected to incur higher costs in the upcoming quarter owing to the "recent spike in utilities costs and change in (product) mix," before normalizing into Q2, along with improving steel pricing and shipment volumes.

The company is looking to finalize a deal with Korean steelmaker Posco 005490.KS in the first half of 2026.

LSEG compiled median price target of 15 brokerages covering Cleveland-Cliffs stood at $13. In 2025, the stock had gained 41.3%.