Cliffs EBITDA is expected to reach approximately $715 million in the fourth quarter of 2026, Cleveland-Cliffs announced on October 19, as higher steel prices support further earnings improvement. The forecast is $103 million above third-quarter adjusted EBITDA of $612 million, although seasonal weakness and additional costs are expected to offset part of the pricing benefit.
Key Takeaways
- Average steel selling prices rose $53 sequentially to $1,177 per net ton in Q3.
- Fourth-quarter adjusted EBITDA guidance implies an increase of about 17% from Q3.
- Management expects 2027 adjusted EBITDA above $4 billion, based on contracts and prevailing price forecasts.
Table of Contents
- Cliffs EBITDA outlook balances higher prices against costs
- Quarterly profit returns as adjusted earnings improve
- Contracts underpin 2027 expectations and debt plans
- Conclusion
Cliffs EBITDA outlook balances higher prices against costs
Cleveland-Cliffs’ third-quarter 2026 results announcement attributes the expected fourth-quarter improvement to increased pricing. Management said seasonality, increased maintenance outages, input costs and incentive compensation accruals would partially offset that benefit.
Average net selling prices for steel products reached $1,177 per net ton in the quarter ended September 30, compared with $1,124 in the second quarter. Chairman and Chief Executive Officer Lourenco Goncalves said selling prices, sales volumes and unit costs all improved sequentially.
The guidance therefore anticipates continued earnings growth despite operating headwinds. It is a management forecast, not a completed quarterly result.
| Item | Details |
|---|---|
| Q3 consolidated revenue | $5.612 billion, compared with $5.226 billion in Q2 2026. |
| Q3 steel product sales volumes | 4.150 million net tons, compared with 4.025 million in Q2 2026. |
| Q3 diluted earnings per share | $0.26 on a GAAP basis; $0.28 on an adjusted basis. |
| Quarter-end liquidity | $3.2 billion as of September 30, 2026. |
Quarterly profit returns as adjusted earnings improve
Third-quarter adjusted EBITDA increased by $326 million from the second quarter’s $286 million and exceeded management’s earlier $575 million guidance by $37 million.
Consolidated GAAP net income was $165 million, reversing a $134 million second-quarter loss. Of that third-quarter profit, $152 million was attributable to Cleveland-Cliffs shareholders; the remainder was attributable to noncontrolling interests.
The return to quarterly profitability did not erase earlier losses. For the first nine months of 2026, the company recorded a consolidated net loss of $198 million. Adjusted EBITDA is also distinct from GAAP net income and should not be read as an equivalent measure of profit.
Contracts underpin 2027 expectations and debt plans
Management expects adjusted EBITDA to exceed $4 billion in 2027, based on contract changes and prevailing price forecasts. Goncalves said newly signed customer contracts contributed to the stronger outlook. That expectation remains dependent on future operating and market conditions.
Debt reduction is another near-term priority. Goncalves said the company expected significant fourth-quarter debt repayment, supported by anticipated free cash flow and property sale proceeds.
Management also maintained its target of net debt below 2.5 times EBITDA by the middle of 2027. This remains a target rather than an achieved leverage level.
Conclusion
The next operating benchmark is the approximately $715 million fourth-quarter adjusted EBITDA forecast, alongside management’s planned debt reduction. Those outcomes will test whether stronger pricing can outweigh seasonal and cost pressures.
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