In today’s briefing:
- Cleveland-Cliffs: Weak Q1 Results, Restructuring Underway, Valuations Reflect Deep Discount
- [Earnings Review] Occidental Beat EPS Expectations on Strong Oil & Gas Performance
- Sakata Inx Corp (4633 JP): Q1 FY12/25 flash update
- [IO Fundamentals 2025/18] Policy Easing and Trade Diplomacy: China’s Coordinated Economic Push
Cleveland-Cliffs: Weak Q1 Results, Restructuring Underway, Valuations Reflect Deep Discount
- EBITDA loss of $174M, net loss of $483M, driven by weak auto demand, high costs, and continuing drag from AMNS slab contract; EBITDA/ton fell sharply to –$42.
- Idling six facilities, exiting loss-making operations, $300M cost savings targeted in H2; slab contract expiry to add ~$500M EBITDA annually from 2026.
- Deep value: Trading at 4.4x EV/EBITDA (2026E), 7.1x P/E, 0.55x P/B, and $653 EV/ton of full steelmaking capacity, reflecting deep cyclical pessimism.
[Earnings Review] Occidental Beat EPS Expectations on Strong Oil & Gas Performance
- Occidental’s Q1 2025 revenue rose by 13.9% YoY but missed estimates by 0.3%. Its net income rose by 6.7% YoY, and its EPS beat estimates by 12.1%.
- Occidental’s earnings beat was fueled by robust oil and gas segment growth, underpinned by stronger price realisations that offset volume softness and reinforced its upstream momentum.
- Occidental closed USD 1.3 billion in asset sales in Q1 and repaid USD 2.3 billion in debt YTD, underscoring its continued focus on debt reduction.
Sakata Inx Corp (4633 JP): Q1 FY12/25 flash update
- Revenue increased 8.3% YoY to JPY64.1bn, with ink sales volume contributing JPY4.0bn and forex JPY500mn.
- Operating profit decreased 1.8% YoY to JPY3.9bn, impacted by cost increases and raw material expenses.
- Segment revenue and operating profit varied, with notable changes in packaging inks, gravure inks, and inkjet inks sales.
[IO Fundamentals 2025/18] Policy Easing and Trade Diplomacy: China’s Coordinated Economic Push
- Chinese officials unveiled a broad set of economic support actions, including rate reductions and substantial liquidity infusions, as part of intensified efforts to cushion the economy from U.S. trade tensions.
- Top U.S. and Chinese officials will meet in Switzerland from May 9–12 to ease trade tensions, boosting investor sentiment and driving iron ore futures to a near two-week high.
- China’s factory output contracted in April, with both the official NBS and Caixin PMI reports showing a decline in manufacturing activity amid weakening foreign demand.
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