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Key Takeaways

• Cleveland-Cliffs is idling plants and reducing spending after it posted a wider-than-expected quarterly loss.

• The steelmaker said the decision would impact six facilities and its investment in a West Virginia transformer production site.

• CEO Lourenco Goncalves explained the moves are designed to streamline operations and enhance efficiency.

Cleveland-Cliffs (CLF) shares tumbled 17% Thursday, a day after the steelmaker announced it was cutting back on production and capital spending in an effort to improve operations.

The company said it will "fully or partially idle six facilities to optimize its footprint, reposition away from loss-making operations, and release excess working capital." The moves are expected to save more than $300 million a year, with additional savings in overhead and improved productivity at its other factories.

In addition, Cleveland-Cliffs will no longer be investing in the development of a transformer production facility in Weirton, W.Va., "due to changes in scope from the project partner that no longer meet Cliffs' investment requirements."

CEO Lourenco Goncalves explained that the company’s first-quarter results were hurt by "non-core assets and the lagging effect of lower index prices in late 2024 and early 2025." Goncalves noted that the steps being taken are aimed at streamlining the business and enhancing efficiency.

Cleveland-Cliffs Posts Wider Loss Than Expected

In the quarter, Cleveland-Cliffs reported an adjusted net loss of $0.92, with revenue up 7% year-over-year to $4.63 billion. Analysts polled by Visible Alpha expected a net loss of $0.83 on revenue of $4.62 billion.

Including today's sharp declines, shares of Cleveland-Cliffs have lost about a quarter of their value this year. In January, CNBC reported that the company was teaming up with rival Nucor (NUE) for a potential bid for U.S. Steel (X), whose $14.1 billion buyout by Nippon Steel was blocked by President Joe Biden.

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