Cleveland-Cliffs Inc. (CLF) has secured a significant victory in its labor relations, announcing a four-year labor deal with the United Auto Workers (UAW) at its Dearborn Works operations. This agreement, effective until July 31, 2028, will cover approximately 1,000 UAW-represented workers at the Dearborn facility. The company highlights this deal as a testament to its commitment to fostering a collaborative and mutually beneficial relationship with its employees.
The new agreement comes amidst a backdrop of mixed financial results for Cleveland-Cliffs. The company’s adjusted earnings for the second quarter of 2024 came in at 11 cents per share, a significant decrease from the 69 cents per share earned in the same period last year. Revenues also took a hit, declining by 14.9% to $5,092 million in the quarter.
The decline in earnings and revenues can be attributed to a decrease in steelmaking revenues. The company’s steelmaking revenues dropped by 15.4% year-over-year to approximately $4.9 billion in the second quarter. This decline was driven by a decrease in the average net selling price per net ton of steel products, which fell by 10.3% year-over-year to $1,125. External sales volumes for steel products also declined by 5.1% year-over-year, reaching approximately 4 million net tons.
Despite the financial challenges, Cleveland-Cliffs remains optimistic about its future prospects. On its second-quarter earnings call, the company announced a downward revision to its projected capital expenditures for 2024, now ranging from $650 to $700 million, compared to the previously anticipated range of $675 to $725 million. However, the company remains confident in its ability to achieve its goal of reducing steel unit costs by approximately $30 per net ton year-over-year.
The stock performance of Cleveland-Cliffs has been negatively impacted in the past year, with shares declining by 16% compared to a 0.2% decline for its industry. Despite this, the company continues to make strides in its labor relations, cost management, and long-term strategic planning, indicating a potential for future growth and improved financial performance.
