Cleveland-Cliffs Reports Strong Third-Quarter 2026 Results
19 Oct 2026 · 2d ago, 4:31 pm
Summary
Cleveland-Cliffs Inc. reported third-quarter 2026 revenues of $5.6 billion, up from $5.2 billion in the prior quarter. The company achieved GAAP net income of $165 million, or $0.26 per diluted share, and a substantial improvement in Adjusted EBITDA to $612 million from $286 million in Q2 2026. Management expressed optimism, expecting Q4 2026 Adjusted EBITDA to reach approximately $715 million and projecting 2027 Adjusted EBITDA to exceed $4 billion, driven by favorable trade environments and contract changes. However, the company made the decision to indefinitely idle galvanizing lines at Stelco due to unsustainable market conditions for galvanized steel.
Key Highlights
- 1
Cleveland-Cliffs reported third-quarter 2026 consolidated revenues of $5.6 billion, an increase from $5.2 billion in the second quarter of 2026.
- 2
The Company recorded GAAP net income of $165 million, or $0.26 per diluted share, for the third quarter of 2026.
- 3
Adjusted EBITDA for the third quarter of 2026 was $612 million, a significant improvement from $286 million in the second quarter of 2026.
- 4
Management expects fourth-quarter 2026 adjusted EBITDA to be approximately $715 million, indicating continued expected growth.
- 5
Based on 2027 contract changes and prevailing price forecasts, the Company anticipates 2027 adjusted EBITDA to exceed $4 billion.
- 6
Third quarter was Stelco's strongest quarter since acquisition, turning into a positive contributor to EBITDA, though galvanizing lines were indefinitely idled due to market conditions.
Management Comments
Lourenco Goncalves
Third quarter was our strongest quarter in three years, with adjusted EBITDA of $612 million, a number above the $575 million guidance we provided three months ago. Average selling price, sales volumes, and unit costs all moved in the right direction relative to Q2 performance. We expect fourth quarter adjusted EBITDA to further increase, even with typical fourth-quarter seasonality and planned maintenance outages. We continued to reduce debt in Q3 and, with amplified free cash flow in Q4 and property sale proceeds, we expect a major debt reduction in the fourth quarter. With all that, we remain on track to reach our leverage target of under 2.5x net debt to EBITDA by the middle of next year. The trade environment continues to support a healthy American steel industry. Imports remain well below historical levels, lead times are extended, and our customers increasingly recognize the value of a reliable domestic supply chain. As a result, our 2027 outlook has improved materially since our last earnings call, as several of the initiatives we identified as drivers of future earnings growth are developing more favorably than originally expected. Based on the new contracts we have already signed with our clients and prevailing index price forecasts, we would expect our 2027 adjusted EBITDA to exceed $4 billion. Third quarter was Stelco’s strongest quarter since we acquired the company two years ago. The Canadian hot-rolled market has improved substantially, turning Stelco into a positive contributor to EBITDA in Q3. However, more needs to be done by the Canadian government to correct a clearly oversupplied market for galvanized steel in Canada. As we haven’t seen, and do not anticipate, any action aimed at improving the unsustainable situation for galvanized steel, we made the difficult but necessary decision to indefinitely idle our galvanizing lines at Stelco. The employees impacted by this will be brought back to work as soon as the current situation improves. In the meantime, as we concentrate on hot rolled products that actually have a market, total production tonnage at Stelco will be maintained, Stelco’s contribution to Cliffs’ EBITDA will further increase, and approximately 2,000 Canadian jobs are preserved.”
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