Cleveland-Cliffs Surged After EBITDA Tripled. Steel Just Got Loud Again.
By The Numbers
- $5.2B — Q2 consolidated revenues
- $286M — Adjusted EBITDA, up $191M from Q1
- ~$575M — Q3 adjusted EBITDA outlook
- $1,124 — Average net selling price per net ton of steel products
- ~+16% — CLF surge on the beat-and-outlook day
Cleveland-Cliffs Inc. (CLF) just reminded the market that steel can still move like a growth stock when the cycle turns. Second-quarter revenue hit $5.2 billion. Adjusted EBITDA printed $286 million, a $191 million jump from $95 million in the first quarter. Management guided third-quarter adjusted EBITDA to about $575 million. The stock ripped double digits.
GAAP still showed a $134 million net loss, or $0.25 per share. That is not the number traders cared about. They cared that EBITDA tripled sequentially, free cash flow turned positive, and CEO Lourenco Goncalves said second-half earnings performance should be the strongest since 2021. Average net selling prices rose to $1,124 per net ton. Liquidity stood at $3.1 billion.
Why the Tape Bought It
It's kinda like a factory that finally gets paid for the price hike it already announced. Imports remain subdued. Lead times are extending. Auto volumes stayed strong and are expected to rise further in Q3. Management also flagged improving conditions in Canada through Stelco. That is operating leverage with a tariff tailwind underneath it.
Hold on. Let me stop here. A company can still lose money on a GAAP basis while the equity rerates on EBITDA trajectory. Cliffs is telling you the second half is the real product. Q3 EBITDA more than double Q2 is the bridge. Q4 expected to exceed Q3 is the kicker.
"When steel prices, volumes, and costs all lean the same direction, the stock stops trading like a museum piece."
The Investor Angle
If your book is all software duration, this print is a regime signal. Industrial and materials names are getting paid while expensive growth absorbs $100 oil and a higher 10-year yield. Cliffs also said it expects to reach a leverage target under 2.5x debt to EBITDA by this time next year if the outlook holds.
That does not make steel riskless. It makes the asymmetry clearer. Missed maintenance quarters are behind them. Price and mix are cooperating. The guide is aggressive enough that the stock has to reprice the back half now, not in October.
Bottom Line
You do not have to trust the CEO sound bite. Trust EBITDA going from $95 million to $286 million to a guided $575 million. Trust $1,124 average selling prices. Trust a market that finally stopped treating Cliffs like a value trap for one loud session.
P.S. The easy trade was the day-one spike. The harder question is whether Q3 actually clears $575 million when the auto and plate orders have to show up in cash.