Shares of iron ore miner and steelmaker Cleveland-Cliffs (CLF 2.83%) declined by 13% in February. However, timing matters, with the shares falling notably after it reported earnings near the end of the month.
There was a lot going on at Cleveland-Cliffs in 2020. CEO Lourenco Goncalves didn't mince any words on that, either, describing the year as "the most transformational" in the company's 173-year history. The big change was that Cleveland-Cliffs bought steelmakers AK Steel and ArcelorMittal USA, the U.S. steel assets of international steel giant ArcelorMittal (MT -1.25%). This basically converted Cleveland-Cliffs from a steel industry supplier into an integrated steel company with assets spanning across the industry's supply chain.
While that's exciting news, the company's fourth-quarter 2020 results didn't live up to Wall Street expectations, which likely put downward pressure on the stock. Fourth-quarter revenue was $2.25 billion, short of the $2.3 billion analysts had been calling for, and adjusted earnings came in at $0.24 per share, below expectations of $0.28. Investors don't usually like it when a company falls short of Wall Street's projections, so it's not surprising that investors sold the stock following the quarterly update.
Ending 2020 on a weak note isn't great, but the big story from here for Cleveland-Cliffs is really that it is starting 2021 with an entirely new business. That said, since the ArcelorMittal USA acquisition only closed in the final days of 2020, there are still a lot of moving parts as Cleveland-Cliffs looks to integrate all of its new assets into its business. Investors should probably keep a close eye on the company's progress in addition to the normal ups and downs of the steel industry.