Cleveland-Cliffs earnings returned to profit in the third quarter of 2026, supported by higher steel selling prices and shipments. In results released October 19 for the period ended September 30, the steelmaker reported revenue of $5.612 billion and net income of $165 million, compared with revenue of $4.734 billion and a $234 million net loss a year earlier.
Key Takeaways
- Revenue rose 18.5% year over year, while operating income swung to a $311 million profit.
- Adjusted EBITDA reached $612 million, exceeding management’s earlier $575 million guidance.
- Management expects further fourth-quarter improvement, while Stelco will indefinitely idle its galvanizing lines.
Table of Contents
- Cleveland-Cliffs earnings reverse last year’s losses
- Higher steel prices and shipments support the recovery
- Debt reduction remains a management priority
- Fourth-quarter outlook rises as Stelco shifts production
- Conclusion
Cleveland-Cliffs earnings reverse last year’s losses
The company’s third-quarter results announcement showed operating income of $311 million, compared with an operating loss of $204 million in the same quarter of 2025. Revenue increased by $878 million.
The recovery also extended to the sequential comparison. Cleveland-Cliffs had reported a $134 million net loss in the second quarter of 2026. Third-quarter adjusted EBITDA, a non-GAAP measure, increased to $612 million from $286 million in the preceding quarter.
The stronger quarter did not erase losses accumulated earlier in the year. For the first nine months of 2026, Cleveland-Cliffs reported a consolidated net loss of $198 million.
| Item | Details |
|---|---|
| Q3 diluted earnings per share | $0.26, compared with a $0.51 loss a year earlier. |
| Q3 adjusted earnings per share | $0.28. |
| Liquidity at September 30, 2026 | $3.2 billion. |
| Long-term debt | $7.645 billion at September 30, 2026, versus $7.253 billion at December 31, 2025. |
Higher steel prices and shipments support the recovery
Steel product shipments increased to 4.150 million net tons from 4.029 million a year earlier. Average net selling prices rose to $1,177 per net ton from $1,032.
Those improvements lifted the steelmaking segment’s gross margin to $454 million, compared with a $56 million gross loss a year earlier. Chairman and Chief Executive Lourenco Goncalves said selling prices, sales volumes and unit costs all improved relative to the second quarter.
Direct automotive sales represented 28% of steelmaking revenue. Distributors and converters accounted for 34%, infrastructure and manufacturing for 28%, and steel producers for the remaining 10%. The mix shows automotive demand remains important, but it is not the company’s only major sales channel.
Debt reduction remains a management priority
Net interest expense was $148 million in the quarter, down from $153 million a year earlier. That remains a substantial expense alongside the recovery in operating profit.
Goncalves said the company reduced debt during the third quarter and expects a larger reduction in the fourth quarter, supported by anticipated free cash flow and property-sale proceeds. Those future reductions are management expectations, not completed transactions.
Management maintained its target of bringing net debt below 2.5 times EBITDA by mid-2027.
Fourth-quarter outlook rises as Stelco shifts production
Cleveland-Cliffs expects fourth-quarter 2026 adjusted EBITDA of approximately $715 million. It expects increased pricing to outweigh seasonal effects, additional maintenance outages, input costs and incentive-compensation accruals.
For 2027, management said adjusted EBITDA could exceed $4 billion, based on contract changes and prevailing price forecasts. That outlook depends partly on future market conditions rather than signed contracts alone.
At Stelco, the company announced an indefinite idling of galvanizing lines, citing an oversupplied Canadian galvanized-steel market. Goncalves said total Stelco production tonnage would be maintained through a focus on hot-rolled products, with affected employees to return when conditions improve.
Conclusion
The next reporting period will test management’s expectation for approximately $715 million in fourth-quarter adjusted EBITDA and further debt reduction. Stelco’s production shift will proceed alongside that push to improve cash generation.
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