Cleveland-Cliffs, a steel company based in Cleveland, has announced a decline in second-quarter profits due to lower selling prices for steel products.
In the same quarter last year, the company reported a profit of $596 million, or $1.13 per share. This year, however, the profit dropped to $347 million, or 67 cents per share.
Although analysts predicted earnings of 72 cents per share, Cleveland-Cliffs fell short with 67 cents per share. Similarly, revenue decreased from $6.34 billion to $5.98 billion, while analysts’ expectations were close to $5.80 billion.
In terms of sales volume, the company sold 4.2 million net tons of steel in the second quarter, compared to approximately 3.6 million net tons a year ago. Despite the increase in volume, the average net selling price per ton of steel declined from $1,487 to $1,255.
CEO Lourenco Gonclaves remarked that the company’s shift to a higher automotive mix resulted in higher realized prices than anticipated, positively impacting earnings before interest, taxes, depreciation, and amortization (EBITDA) compared to the first quarter.
Gonclaves expressed optimism about the future, stating, “We are on pace for our best shipment year since becoming a steel company.”