Cleveland-Cliffs Stock Jumps 20% as Steel Maker Beats Estimates and Lands New $400 Million Defense Deal

Shares of Cleveland-Cliffs surged more than 20% Thursday after the steel producer posted a smaller-than-expected second-quarter loss and announced a new multiyear Defense Department contract, giving investors a double dose of good news following weeks of sharp declines in the stock.

Cleveland-Cliffs traded at $11.35, up $1.90, as of 12:42 p.m. Eastern time. The rally builds on a stretch of intraday buying that began at the market open, with shares climbing from roughly $10.67 to as high as $11.25 before settling near session highs.

Second-quarter results beat expectations

Cleveland-Cliffs reported second-quarter 2026 revenues of $5.2 billion, a $300 million increase from the previous quarter and roughly in line with Wall Street’s consensus estimate of $5.18 billion. The company posted a GAAP net loss of $134 million, or $0.25 per diluted share, with an adjusted net loss of $0.20 per diluted share, an improvement over the $0.21 per share loss analysts had been expecting on average heading into the report.

The quarter marked a significant improvement from the company’s first-quarter performance. Cleveland-Cliffs posted a GAAP net loss of $229 million, or $0.42 per diluted share, in the first quarter of 2026, meaning the company roughly halved its per-share loss quarter over quarter. Adjusted EBITDA came in at $286 million for the second quarter, a $191 million improvement compared with the $95 million recorded in the first quarter. Operating cash flow for the quarter was $230 million, and the company reported liquidity of $3.1 billion as of June 30.

A new defense contract adds to the momentum

Beyond the earnings beat, Cleveland-Cliffs also benefited Thursday from news of a new sole-source, five-year contract with the Defense Logistics Agency worth up to $400 million. Under the agreement, Cleveland-Cliffs will supply grain-oriented electrical steel to multiple branches of the U.S. military through 2030, adding a defense-sector revenue stream to a company whose business has historically centered heavily on automotive-grade steel products.

CEO points to a stronger second half ahead

Cleveland-Cliffs Chairman, President and Chief Executive Officer Lourenco Goncalves struck an optimistic tone about the company’s trajectory heading into the back half of the year. “Looking ahead, we have clear visibility into the continuous earnings improvement that began during the first half of the year,” Goncalves said. “With average selling prices, volumes, and costs all moving in the right direction, our second-half earnings performance should be our strongest since 2021 as Q4 EBITDA is currently expected to even further exceed our Q3 guidance. We expect to finish the year on a positive note and enter 2027 with significant momentum and additional opportunities for upside, including the higher reset of fixed price contracts and much improved profits in Canada.”

A stock that had fallen sharply heading into earnings

Thursday’s rally comes after a difficult stretch for Cleveland-Cliffs shares. The stock had declined roughly 24% over the 30 days leading up to the earnings report and was down nearly 32% year-to-date as of earlier this week, reflecting broader investor caution around the domestic steel industry tied to pricing power, capacity utilization and competition from imported steel. Shares had traded as low as $8.84 just three days before Thursday’s report, before climbing to close near $11.21 following the earnings release and defense contract announcement.

Options markets had anticipated significant volatility heading into the report. According to data compiled by Bloomberg, options pricing implied an 11% potential move in Cleveland-Cliffs shares on earnings day, a figure the stock has exceeded in five of its last eight quarterly reports. The company’s largest historical earnings-day swing came in October 2025, when shares jumped 22.8% against a implied move of just 6.9%.

Mixed underlying fundamentals

Despite Thursday’s rally, Cleveland-Cliffs’ broader financial picture remains complicated. The company generated approximately $18.61 billion in revenue over the trailing 12 months, but continues to operate with thin to negative margins, posting a profit margin of roughly negative 6% and negative free cash flow of around $477 million over that period. The company’s most recent quarterly net loss, prior to the improvement reflected in Thursday’s report, had been roughly $237 million.

Ahead of the earnings release, analyst sentiment on the stock had been notably split. Some market observers viewed Cleveland-Cliffs as a beaten-down steel producer trading below its intrinsic value, pointing to a fair value estimate of $10.86 per share compared with a pre-earnings trading price of around $9.28, a valuation gap bulls attributed to the company’s ongoing cost-reduction efforts, including strategic footprint optimization and internal coke and feedstock integration. Bears, meanwhile, pointed to the company’s recent losses and uncertainty heading into the earnings report as reasons for caution.

A company built around North American steel

Cleveland-Cliffs is a leading North America-based steel producer with a particular focus on value-added sheet products for the automotive industry, operating manufacturing facilities across the United States and Canada. The company’s business has historically been closely tied to automotive demand, making the newly announced defense contract a notable diversification move into a different end market with long-term, government-backed demand visibility through 2030.

With Cleveland-Cliffs management projecting its strongest second-half earnings performance since 2021, investors will be watching closely to see whether the improving trends in average selling prices, sales volumes and cost management highlighted by Goncalves continue to materialize over the coming quarters. The company’s next scheduled updates, including any further detail on its fixed-price contract resets and progress on profitability in its Canadian operations, are likely to serve as key checkpoints for determining whether Thursday’s sharp rally reflects the start of a sustained recovery or a shorter-term reaction to a single strong quarter following weeks of investor pessimism.