Cleveland-Cliffs Reports 11% Revenue Decline and $538 Million Operating Loss in Q1 2025

Cleveland-Cliffs Inc. reported a significant decline in financial performance for the first quarter of 2025, with revenues totaling $4.63 billion, down 11% from $5.20 billion in the same period last year. The company experienced an operating loss of $538 million, compared to a loss of $38 million in the first quarter of 2024. The net loss attributable to Cliffs shareholders was $495 million, or $1.00 per share, a stark contrast to the $67 million loss, or $0.14 per share, reported in the prior year. The decrease in revenue was primarily driven by a 20% drop in sales from the direct automotive market, reflecting weaker demand and lower average selling prices.

In terms of operational changes, Cleveland-Cliffs has made strategic decisions to idle several facilities, including the Dearborn Works and the Conshohocken, Riverdale, and Steelton plants, due to financial underperformance and ongoing weak automotive production. The company also partially idled the Minorca and Hibbing Taconite mines to manage excess inventory. These operational adjustments are expected to streamline operations and enhance efficiency while minimizing impacts on flat-rolled steel output. The company continues to focus on optimizing its footprint and aligning production capabilities with market demand.

Cleveland-Cliffs completed the acquisition of Stelco Holdings Inc. on November 1, 2024, which is anticipated to enhance its market position and diversify its customer base across various industrial end markets in Canada. The acquisition is expected to double the company's exposure to the North American spot market, providing further insights into market dynamics. The integration of Stelco is projected to yield significant synergies, including cost savings in procurement and operational efficiencies.

The company reported a decrease in Adjusted EBITDA, which fell to $(174) million for the first quarter of 2025, down from $414 million in the previous year. This decline was attributed to reduced gross margins resulting from lower selling prices and increased costs associated with idled facilities. Cleveland-Cliffs' total assets as of March 31, 2025, were valued at $20.84 billion, a slight decrease from $20.95 billion at the end of 2024. The company maintains a strong liquidity position, with $57 million in cash and cash equivalents and approximately $3.0 billion in total liquidity available under its Asset-Based Revolving Credit Agreement.

Looking ahead, Cleveland-Cliffs anticipates a gradual recovery in domestic steel demand, supported by recent government tariffs on imports and an expected increase in automotive production. The company remains committed to enhancing its operational efficiency and capturing synergies from recent acquisitions while navigating the challenges posed by market volatility and fluctuating commodity prices.