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SEC filingRevenue grew 6% to $4.76B on higher HRC pricing, but net loss improved to $(229)M from $(486)M.
For Q1 2026, consolidated revenue increased $293M versus Q1 2025, driven by the Steelmaking segment where revenue rose 6% to $4.76B. The primary driver was a 24% jump in average hot-rolled coil prices to $1,048 per net ton, alongside favorable sales mix as the low-margin ArcelorMittal slab contract ended. Cost of goods sold declined $20M largely due to lower idle facility charges, partially offset by elevated utility costs from extreme winter weather. Consolidated gross margin improved from -9% to -2%. Net loss narrowed to $(229)M from $(486)M, benefiting from the higher gross margin and a $68M decrease in income tax benefit.
Steelmaking segment revenue of $4.76B was supported by strong pricing across hot-rolled, coated, and cold-rolled products. Shipments slipped 1% to 4,108 thousand net tons, but the mix shifted toward higher-margin hot-rolled steel. Direct automotive revenue grew 5%, while distributors and converters revenue surged 19% on improved pricing. The Other Businesses segment posted Adjusted EBITDA of $15M, up from $10M in the prior year.
Management expects domestic steel demand to grow further due to sustained Section 232 tariffs (now 50%), reduced imports, and recovering end-user markets, particularly automotive. The upcoming idling of the Gary plate finishing line and a Burns Harbor plate mill in Q2 2026 should streamline operations. Capital expenditures are forecast at ~$800M over the next 12 months, primarily sustaining. The partnership with POSCO remains under negotiation, and asset sales are being explored to reduce debt. Liquidity stands at $3.1B, including $45M cash and $3.1B ABL availability.
As of March 31, 2026, Cleveland-Cliffs held $45 million in cash and cash equivalents, down from $57 million at year-end 2025. Total assets were $20.1 billion, with inventories of $4.6 billion (down from $4.8 billion) and net property, plant, and equipment of $9.3 billion. Total debt increased to $7.8 billion from $7.3 billion, primarily due to $507 million in net borrowings under the ABL Facility. Shareholders' equity decreased to $5.8 billion from $6.1 billion, driven by a net loss of $237 million and other comprehensive losses. The ABL Facility had $3.1 billion of available borrowing capacity after $959 million drawn and $48 million in letters of credit.
The company has purchase commitments for principal raw materials (iron ore, coke, coal, chrome, industrial gases, electricity, natural gas, and transportation services) under annual and multi-year agreements, some with minimum quantity requirements. Additionally, $300 million of surety-backed letters of credit and surety bonds were outstanding, along with $48 million in letters of credit under the ABL Facility. Environmental and asset retirement obligations totaled $722 million ($605 million ARO and $117 million environmental), with $29 million classified as current.
No share repurchases occurred during Q1 2026; the remaining authorization under the $1.5 billion program is $1.4 billion. No dividends were declared or paid. Capital expenditures were $126 million (2.6% of sales), with cash paid of $152 million. Debt increased by $510 million net, primarily from ABL borrowings. The company did not issue any new senior notes.
The company operates four operating segments (Steelmaking, Tubular, Tooling and Stamping, European Operations) but has one reportable segment: Steelmaking. For Q1 2026, Steelmaking generated $4.8 billion in revenue and $80 million in Adjusted EBITDA. Other Businesses (Tubular, Tooling and Stamping, European Operations) contributed $167 million in revenue and $15 million in Adjusted EBITDA. Revenue by market for Steelmaking: direct automotive $1.4B, infrastructure and manufacturing $1.4B, distributors and converters $1.5B, and steel producers $0.6B.