NYSE:CLF
CLEVELAND-CLIFFS INC.
A major North American producer of flat rolled steel products supplying critical sectors like automotive and construction.
Key Metrics
Investment Thesis
Bull Case
Despite recent losses, the company possesses a dominant market position in North America's flat-rolled steel sector with integrated mining assets that secure raw material supply. Strategic cost-cutting initiatives and potential recovery in global steel demand could trigger margin expansion once pricing power returns. Long-term value exists given the essential nature of steel in infrastructure rebuilding and industrial growth cycles.
Bear Case
The company faces severe profitability challenges with a retained earnings deficit of -$529M and negative net profit trending downward over the last three years. High debt levels including $7.25B in long-term debt combined with negative operating cash flow create significant refinancing and liquidity risks. Industry headwinds including oversupply conditions and weak pricing power make a near-term turnaround uncertain for investors.
About CLEVELAND-CLIFFS INC.
Cleveland-Cliffs Inc. is a leading global supplier of flat rolled steel products, including hot-rolled coil and cold-rolled coil, serving markets such as automotive, appliance, construction, and packaging. The company operates primarily in the United States with significant supply chains in Canada and Latin America, focusing on high-quality carbon steel for manufacturing industries.
Analysis
Management Discussion
Recent financial performance reveals a challenging operational period marked by significant losses, with net profit declining to -$1.43B in 2025 compared to $450M in 2023. The operating environment has deteriorated sharply, evidenced by negative gross profit of -$860M and substantial non-cash adjustments of $1.46B reflecting asset impairments or restructuring charges. Cash flow from operations turned negative at -$462M while capital expenditures reached $561M, indicating heavy investment amidst declining profitability.
Industry Overview
The global steel industry is highly cyclical, driven by construction activity, automotive production, and manufacturing demand in major economies like the US, China, and Europe. Competition is intense with many players operating on thin margins, while environmental regulations are forcing industry-wide investments in cleaner production technologies. Consolidation trends favor larger integrated producers who can achieve scale efficiencies and secure long-term supply contracts.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $22.99B | $22.00B | $19.18B | $18.61B |
| Cost of Revenue | $20.47B | $20.61B | $19.11B | $19.47B |
| Gross Profit | $2.52B | $1.39B | $70.0M | $-860.0M |
| Operating Expenses | $579.0M | $714.0M | $826.0M | $719.0M |
| Operating Income | $1.94B | $677.0M | $-756.0M | $-1.58B |
| G&A | $465.0M | $577.0M | $486.0M | $543.0M |
| Stock-Based Comp | $28.0M | $41.0M | $50.0M | $57.0M |
| D&A | $1.03B | $973.0M | $951.0M | $1.24B |
| Depreciation | $988.0M | $932.0M | $903.0M | $1.15B |
| Amortization | $13.0M | $13.0M | $24.0M | $81.0M |
| Other OpEx | $114.0M | $137.0M | $340.0M | $176.0M |
| Non-Operating Income | $-143.0M | $-80.0M | $-187.0M | $-425.0M |
| Pre-Tax Income | $1.80B | $597.0M | $-943.0M | $-2.00B |
| Income Tax | $423.0M | $148.0M | $-235.0M | $-581.0M |
| Continuing Ops | $1.37B | $449.0M | $-708.0M | $-1.42B |
| Discontinued Ops | $3.0M | $1.0M | $0 | $-5.0M |
| Net Income | $1.38B | $450.0M | $-708.0M | $-1.43B |
| Minority Interest | $41.0M | $51.0M | $46.0M | $50.0M |
| Net to Common | $1.33B | $399.0M | $-754.0M | $-1.48B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $7.42B | $6.64B | $6.91B | $6.43B |
| Cash & Equivalents | $26.0M | $198.0M | $54.0M | $57.0M |
| Accounts Receivable | $1.96B | $1.84B | $1.58B | $1.44B |
| Inventory | $5.13B | $4.46B | $5.09B | $4.77B |
| Other Current Assets | $306.0M | $138.0M | $183.0M | $164.0M |
| Long-Term Assets | $11.33B | $10.90B | $14.04B | $13.58B |
| PP&E (Net) | $9.07B | $8.89B | $9.94B | $9.48B |
| Intangibles | — | — | $1.17B | $1.14B |
| Goodwill | $1.13B | $1.00B | $1.77B | $1.81B |
| Operating Leases | — | — | $351.0M | $292.0M |
| Other LT Assets | $1.13B | $1.00B | $809.0M | $855.0M |
| Total Assets | $18.75B | $17.54B | $20.95B | $20.01B |
| Current Liabilities | $3.55B | $3.51B | $3.32B | $3.30B |
| Accounts Payable | $2.19B | $2.10B | $2.01B | $1.89B |
| Current Leases | $43.0M | $41.0M | $50.0M | $48.0M |
| Other Current Liab | $1.32B | $988.0M | $889.0M | $965.0M |
| Long-Term Liabilities | $7.16B | $5.91B | $10.73B | $10.39B |
| Long-Term Debt | $4.25B | $3.14B | $7.07B | $7.25B |
| LT Operating Leases | $195.0M | $197.0M | $275.0M | $234.0M |
| Other LT Liab | $2.72B | $2.57B | $3.39B | $2.90B |
| Total Liabilities | $10.71B | $9.41B | $14.05B | $13.69B |
| Shareholders' Equity | $8.04B | $8.12B | $6.90B | $6.32B |
| Paid-In Capital | $4.87B | $4.86B | $4.76B | $5.74B |
| Retained Earnings | $1.33B | $1.73B | $979.0M | $-529.0M |
| AOCI | $1.83B | $1.66B | $1.54B | $1.49B |
| Treasury Stock | $310.0M | — | — | — |
| Total L&E | $18.75B | $17.54B | $20.95B | $20.01B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.38B | $450.0M | $-708.0M | $-1.43B |
| Non-Cash Adjustments | $1.50B | $2.35B | $1.64B | $1.46B |
| Working Capital Changes | $-449.0M | $-534.0M | $-828.0M | $-496.0M |
| Cash from Operations | $2.42B | $2.27B | $105.0M | $-462.0M |
| Capital Expenditures | $943.0M | $646.0M | $695.0M | $561.0M |
| Cash from Investing | $-936.0M | $-591.0M | $-3.21B | $-479.0M |
| Debt Repayments | $1.36B | $0 | $845.0M | $685.0M |
| Share Buybacks | $240.0M | $152.0M | $733.0M | $0 |
| Cash from Financing | $-1.51B | $-1.50B | $2.97B | $942.0M |
| FX Effect | $0 | $0 | $-1.0M | $2.0M |
| Net Change in Cash | $-22.0M | $172.0M | $-137.0M | $1.0M |
| Beginning Cash | $48.0M | $26.0M | $198.0M | $60.0M |
| Ending Cash | $26.0M | $198.0M | $60.0M | $63.0M |
Frequently Asked Questions
How does CLEVELAND-CLIFFS INC. make money?
The company generates revenue through three primary streams: Flat Rolled Steel Products which include hot-rolled coil (HRC) and cold-rolled coil (CRC), Steel Coil Processing services that add value to HRC, and Iron Ore Mining operations providing raw material inputs for its steelmaking process.
What are the main risks for CLF?
1. High sensitivity to cyclical fluctuations in global steel demand and commodity price volatility affecting margins. 2. Regulatory and environmental compliance costs associated with emissions reduction targets in the US and Canada. 3. Persistent low-margin environment in the flat-rolled steel industry exacerbated by weak pricing power. 4. Exposure to foreign exchange rate fluctuations impacting cross-border trade revenues.
What is CLF's competitive advantage?
1. Strategic North American footprint with integrated mining and steel production capabilities reducing logistics costs. 2. Strong relationships with key automotive and appliance OEMs due to consistent quality and delivery reliability. 3. Diversified product portfolio across construction, industrial, and consumer packaging applications providing market resilience.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.