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This Week's Bonus Content
2 Steel Giants Just Reported Earnings—and Told Very Different Stories
Written by Nathan Reiff. First Published: 10/21/2026.
Key Points
- Steel Dynamics posted a strong Q3 2026 with 35% year-over-year revenue growth to $6.5 billion, though EPS fell short of analyst expectations.
- Cleveland-Cliffs more than doubled its adjusted EBITDA sequentially and expects the figure to exceed $4 billion in 2027.
- Steel Dynamics offers a more established earnings profile, while Cleveland-Cliffs presents greater turnaround potential alongside substantial debt.
- Special Report: The Bank Failure Rulebook Has You Backing It
A multitude of often-conflicting factors make the domestic steel industry a complex environment, with some steel companies navigating it more successfully than others. Following their Q3 earnings reports, two industry leaders—Steel Dynamics Inc. (NASDAQ: STLD) and Cleveland-Cliffs Inc. (NYSE: CLF)—are showing how higher domestic prices are interacting with elevated financing costs, inflation, and uneven demand.
Reduced imports, shifts in infrastructure spending and manufacturing investment, changing tariff policies, and other variables are affecting both pricing and demand. Although steel demand appears to be improving in some markets—including energy, infrastructure, and certain data center applications—and the reshoring of some manufacturing has had a positive impact, the housing market remains vulnerable. Ultimately, these factors contributed to a stronger overall quarter for Steel Dynamics, while Cleveland-Cliffs may have more room for a turnaround.
STLD: Strong Operating Quarter Firms Up Competitive Advantages
Steel Dynamics delivered fairly robust Q3 2026 results, thanks in large part to its diversified business model. With $6.5 billion in net sales, the company posted an impressive 35% year-over-year (YOY) improvement in its top line. Earnings per share (EPS) nearly doubled over the same period but fell somewhat short of analyst predictions.
The company's steel operations led the way, with particularly strong steel shipments helping drive a 43% sequential improvement in steel operating income. Steel Dynamics increased both its shipments and its average realized selling price, suggesting that demand could persist even as prices rise.
On closer examination, the benefits Steel Dynamics may reap from higher prices and ongoing tariffs could be at least partially offset by margin pressure. The company is simply unable to pass along all of the increased costs for raw steel products.
One area for investors to watch is the firm's aluminum business, which appears to be progressing toward profitability in the coming quarters. This could provide a helpful buffer in the event of price or demand shocks in the steel industry.
For investors, the question is whether Steel Dynamics remains a worthwhile investment after rallying over 40% year to date (YTD), with shares trading at more than 22x earnings. While two-thirds of analysts call STLD a Buy, near-term upside potential may be limited. Steel Dynamics' growing stability is therefore a key benefit.
CLF: Higher-Stakes Recovery in Progress, With Obstacles Remaining
Cleveland-Cliffs' latest earnings tested whether a broader turnaround may be possible. CLF boosted revenue by nearly 19% YTD but fell slightly short of sales expectations. On the other hand, EPS beat predictions by four cents.
The company's earnings report makes a convincing case that a turnaround is not only possible but already in progress. Adjusted EBITDA improved substantially, driven by strong shipments and rising selling prices, and was further supported by lower-than-expected costs.
Renewing contracts for the coming year is essential for Cleveland-Cliffs. The company reported that this process is well underway and that many customers are increasing their requested volumes. Together, these developments should lead to more than $1 billion in added EBITDA compared with the prior-year period.
Perhaps most importantly, company management offered a rosy outlook despite seasonal weakness toward the end of the year. Management expects adjusted EBITDA to exceed $4 billion by 2027.
If that forecast holds, Cleveland-Cliffs will be in a much safer financial position. The company will be able to reduce debt with strong free cash flow and proceeds from property sales while maintaining strong overall liquidity.
Despite the promise in Cleveland-Cliffs' latest earnings report, the stock likely remains a greater risk for investors than STLD. Debt remains high at $7.7 billion, saddling the firm with hefty interest expenses. Its Stelco business is under pressure from rising trade tensions between the United States and Canada.
These risks may explain why analysts remain cautious about CLF, with the majority calling shares a Hold for now. At the same time, if the company can deliver on its lofty predictions, it could be poised for a bigger recovery than STLD or other firms across the industry. Doing so will require a convergence of favorable prices, strong contracts, and continued operational improvements.
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