Third quarter 2026
Filed Oct 19, 2026Cleveland-Cliffs Reports Third-Quarter 2026 Results
Third-quarter revenue, steel shipments, average selling price, profitability, Adjusted EBITDA and operating cash flow improved from the second quarter, while Adjusted EBITDA exceeded the $575 million guidance cited by management and fourth-quarter Adjusted EBITDA is expected to increase to approximately $715 million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated revenues, three months ended September 30, 2026GAAP | $5.6B | – | – |
| Consolidated revenues, nine months ended September 30, 2026GAAP | $15.76B | – | – |
| Cost of goods sold, three months ended September 30, 2026GAAP | −$5.15B | – | – |
| Selling, general and administrative expenses, three months ended September 30, 2026GAAP | −$153M | – | – |
| Restructuring and other charges, three months ended September 30, 2026GAAP | −$1M | – | – |
| Asset impairment, three months ended September 30, 2026GAAP | — | – | – |
| Operating income (loss), three months ended September 30, 2026GAAP | $311M | – | – |
| Operating income (loss), nine months ended September 30, 2026GAAP | $49M | – | – |
| Interest expense, net, three months ended September 30, 2026GAAP | −$148M | – | – |
| Income tax benefit (expense), three months ended September 30, 2026GAAP | −$46M | – | – |
| Net income (loss), three months ended September 30, 2026GAAP | $165M | – | – |
| Net income (loss), nine months ended September 30, 2026GAAP | −$198M | – | – |
| Net income (loss) attributable to Cliffs shareholders, three months ended September 30, 2026GAAP | $152M | – | – |
| Diluted earnings (loss) per common share attributable to Cliffs shareholders, three months ended September 30, 2026GAAP | $0.26 | – | – |
| Diluted adjusted earnings (loss) per common share attributable to Cliffs shareholders, three months ended September 30, 2026non-GAAP | $0.28 | – | – |
| Adjusted net income (loss) attributable to Cliffs shareholders, three months ended September 30, 2026non-GAAP | $161M | – | – |
| Total EBITDA, three months ended September 30, 2026non-GAAP | $618M | – | – |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $612M | $326 million improvement | – |
| Adjusted EBITDA, nine months ended September 30, 2026non-GAAP | $993M | – | – |
| Net cash provided (used) by operating activities, three months ended September 30, 2026GAAP | $224M | – | – |
| Net cash provided (used) by operating activities, nine months ended September 30, 2026GAAP | $129M | – | – |
| Purchase of property, plant and equipment, three months ended September 30, 2026GAAP | −$152M | – | – |
| Purchase of property, plant and equipment, nine months ended September 30, 2026GAAP | −$461M | – | – |
| Net cash used by investing activities, three months ended September 30, 2026GAAP | −$121M | – | – |
| Net cash provided (used) by financing activities, three months ended September 30, 2026GAAP | −$102M | – | – |
| Cash and cash equivalents at end of periodGAAP | $77M | – | – |
| Long-term debtGAAP | $7.64B | – | – |
| Total liquidity as of September 30, 2026other | $3.2B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Steelmaking Segment, three months ended September 30, 2026External sales volumes were 4,150 thousand net tons and average net selling price per net ton of steel products was $ 1,177. | $5.45B | – | – |
| Steelmaking Segment, nine months ended September 30, 2026External sales volumes were 12,283 thousand net tons and average net selling price per net ton of steel products was $ 1,117. | $15.26B | – | – |
Fourth-quarter 2026 and 2027 outlook
- NoteFourth-quarter 2026 adjusted EBITDA: approximately $715 million
- Note2027 adjusted EBITDA: exceed $4 billion
- NoteFourth-quarter adjusted EBITDA is expected to increase from the third quarter as a result of increased pricing, partially offset by seasonality, increased maintenance outages, input costs and incentive compensation accruals.
What drove it
- Third-quarter 2026 steel product sales volumes were 4.2 million net tons, consisting of 46% hot-rolled, 31% coated, 15% cold-rolled, 4% plate, and 4% stainless and electrical.
- Steelmaking cash margin was $ 685 million, compared with $ 205 million in the prior-year quarter and $ 349 million in the second quarter of 2026.
- Steelmaking gross margin was $ 454 million, compared with $ (56) million in the prior-year quarter and $ 113 million in the second quarter of 2026.
- Steelmaking revenues included $1.8 billion, or 34%, of sales to distributors and converters; $1.5 billion, or 28%, to automotive; $1.5 billion, or 28%, to infrastructure and manufacturing; and $532 million, or 10%, to steel producers.
- Management cited increased pricing as the driver of expected fourth-quarter Adjusted EBITDA growth.
- Management stated that Stelco was a positive contributor to EBITDA in the third quarter as the Canadian hot-rolled market improved substantially.
Concerns
- Fourth-quarter pricing gains are expected to be partially offset by seasonality, increased maintenance outages, input costs and incentive compensation accruals.
- The Company decided to indefinitely idle its galvanizing lines at Stelco because of what management described as an oversupplied Canadian galvanized-steel market.
- Long-term debt was $ 7,645 million at September 30, 2026.
- Nine-month net income (loss) was $ (198) million and nine-month net cash provided (used) by operating activities was $ 129 million.
What to watch
- Delivery of approximately $715 million of fourth-quarter 2026 Adjusted EBITDA.
- The effect of increased pricing against seasonality, planned maintenance outages, input costs and incentive compensation accruals.
- Expected fourth-quarter debt reduction, supported by amplified free cash flow and property sale proceeds, as described by management.
- Stelco's EBITDA contribution and the operational impact of idling galvanizing lines while maintaining total production tonnage.
- Progress toward management's leverage target of under 2.5x net debt to EBITDA by the middle of next year.
- Execution against management's expectation that 2027 Adjusted EBITDA will exceed $4 billion.
Balance sheet and cash flow
- Total liquidity was $3.2 billion as of September 30, 2026.
- Cash and cash equivalents were $ 77 million at September 30, 2026, compared with $ 57 million at December 31, 2025.
- Long-term debt was $ 7,645 million at September 30, 2026, compared with $ 7,253 million at December 31, 2025.
- Net cash provided by operating activities was $ 224 million for the three months ended September 30, 2026, compared with net cash used by operating activities of $ (143) million in the prior-year period.
- Purchase of property, plant and equipment was $ (152) million for the three months ended September 30, 2026.
- The Company reported net cash used by financing activities of $ (102) million for the three months ended September 30, 2026, including $ (61) million of borrowings (repayments) under ABL Facility, net.
Analysis
Cleveland-Cliffs reported a materially improved third quarter. Consolidated revenues were $5.6 billion, compared with $5.2 billion in the second quarter of 2026 and $4,734 million in the prior-year quarter. GAAP net income was $165 million, compared with a GAAP net loss of $134 million in the second quarter and a net loss of $234 million in the prior-year quarter. Diluted GAAP earnings were $0.26 per share and adjusted diluted earnings were $0.28 per share. Adjusted EBITDA reached $612 million, compared with $286 million in the second quarter and $143 million in the prior-year quarter.
The Steelmaking Segment supplied the core improvement. Third-quarter segment revenue was $5,447 million, supported by 4,150 thousand net tons of external sales volumes and an average net selling price of $ 1,177 per net ton. This compared with 4,025 thousand net tons and $ 1,124 per net ton in the second quarter. Cash margin rose to $685 million from $349 million sequentially, and gross margin rose to $454 million from $113 million. The third-quarter product mix was led by hot-rolled products at 46% of steel product sales volumes, followed by coated products at 31%.
Cash generation also improved in the quarter. Operating activities generated $224 million of cash, compared with a use of $143 million in the prior-year quarter. The Company spent $152 million on property, plant and equipment and reported net cash used by financing activities of $102 million. Liquidity was $3.2 billion at September 30, 2026. Cash and cash equivalents were $77 million, while long-term debt was $7,645 million. Management said it continued to reduce debt during the quarter and expects a major debt reduction in the fourth quarter from amplified free cash flow and property sale proceeds.
Management expects fourth-quarter 2026 Adjusted EBITDA of approximately $715 million, above third-quarter Adjusted EBITDA of $612 million. Increased pricing is expected to drive the increase, while seasonality, maintenance outages, input costs and incentive compensation accruals are expected offsets. Management also stated that it expects 2027 Adjusted EBITDA to exceed $4 billion based on contract changes and prevailing price forecasts. The release identifies Stelco's improved hot-rolled market contribution as a positive, but the indefinite idling of Stelco galvanizing lines highlights continuing weakness in Canada's galvanized-steel market.
The period's principal items to monitor are fourth-quarter pricing realization, the cash flow and property-sale support for debt reduction, the impact of planned outages and cost pressures, and whether Stelco can increase its EBITDA contribution while redirecting production toward hot-rolled products. The stated under-2.5x net debt to EBITDA leverage target by the middle of next year and the expectation for 2027 Adjusted EBITDA to exceed $4 billion make debt reduction and contract execution central to the outlook.
Management, verbatim
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.
Lourenco Goncalves, Chairman and CEO
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.
Lourenco Goncalves, Chairman and CEO
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.
Lourenco Goncalves, Chairman and CEO
Not in the filing
stated, not guessed- Free cash flow was not reported.
- Gross margin percentage was not reported.
- Operating margin was not reported.
- GAAP and non-GAAP tax rates were not reported.
- Share repurchases and dividends were not reported.
- A prior outlook section was not provided; therefore, no formal comparison of actual results with prior guidance is included.
- Fourth-quarter 2026 revenue, gross margin, operating expenses and tax-rate guidance were not reported.
- No reconciliation of fourth-quarter 2026 or full-year 2027 expected Adjusted EBITDA to GAAP net income was provided because the Company stated it was unable to reconcile those measures without unreasonable effort.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.