Story Stocks

Cleveland-Cliffs (CLF) delivered mixed 2Q25 results, easily surpassing EPS expectations, driven by a potent combination of higher qtr/qtr average net selling prices, improved shipment volumes, and significant steel unit cost reductions. Although CLF fell short of Q2 revenue estimates, the company's vastly improved profitability and its bullish outlook for Q3 and FY25 are more than offsetting the disappointment from the top-line miss. The company’s results reflect operational resilience amid a challenging steel demand environment, bolstered by the Trump Administration’s staunch support for domestic steel and automotive sectors.

• Recent tariff increases to 50% on steel imports from major countries have begun to shield domestic manufacturers from unfairly traded imports, creating a favorable tailwind for CLF and its peers. This policy-driven protection, coupled with improving automotive demand, is positioning CLF to capitalize on a strengthening manufacturing landscape. 
• The average net selling price per ton of steel products in Q2 was $1,015, down approximately 10% yr/yr from $1,128, reflecting broader market pricing pressures and a higher mix of non-automotive sales. However, the 3.5% qtr/qtr increase from $981 in Q1 signals a recovery driven by several factors: stronger domestic steel pricing supported by tariff protections, a favorable shift toward higher-value automotive-grade steel, and reduced exposure to low-priced slab contracts.
• External sales volumes also rose impressively by 7.5% yr/yr to 4.29 mln net tons, a record for the company, reflecting resurgent macroeconomic activity and manufacturing demand, particularly in the automotive sector, which remains a cornerstone of CLF’s business.
• CLF's footprint optimization initiatives, announced in early 2025, have swiftly begun to yield tangible benefits to both costs and revenues. These initiatives include the full idling of the Minorca mine and partial idling of the Hibbing Taconite mine in Minnesota to reduce excess pellet inventory, the idling of the blast furnace, BOF steel shop, and continuous casting facilities at Dearborn Works in Michigan, and the full idling of facilities at Riverdale, Conshohocken, and Steelton due to uncompetitive cost structures.
• These actions are projected to deliver over $300 mln in annual savings, with $145 mln specifically from flat-rolled optimization and $165 mln from exiting non-core assets like rail, high-carbon sheet, and specialty plate products.
• Steel unit cost reductions were a standout in Q2, with a $15 per net ton decrease compared to Q1, contributing significantly to margin improvement. Key drivers include the aforementioned footprint optimization, which reduced fixed costs through facility idling and operational consolidation, alongside lower raw material costs, particularly for coal, and easing supply chain constraints. The strategic shift away from unprofitable contracts, such as the slab supply agreement set to expire by year-end, further alleviated cost pressures.
• The combination of higher average net selling prices, footprint optimization, and steel unit cost reductions drove a $271 million qtr/qtr improvement in adjusted EBITDA, reaching $97 mln in Q2. Management projects further EBITDA growth in Q3, underpinned by an anticipated additional $20 per net ton cost reduction and sustained shipment volumes of approximately 4.3 mln metric tons, in line with Q2’s record performance. The termination of the unprofitable slab contract, expected to add $500 mln to annualized EBITDA starting in 2026, and the ongoing benefits from tariff protections and automotive volume recovery, further enhance the company’s outlook.

CLF's Q2 results highlight a remarkable turnaround in profitability, driven by operational efficiencies and favorable market dynamics. The company’s bullish outlook is well-supported by the Trump Administration’s tariff policies, an improving macroeconomic environment, and the prospect of lower interest rates.

Verizon (VZ +4.8%) is trading higher today after reporting its Q2 results this morning. This telecom giant reported EPS above expectations, which is a typical result for the company. What stands out is its revenue growth, which rose 5.2% yr/yr to $34.5 bln. This was nicely above expectations, and its strongest growth in the last 15 quarters.

• Adjusted EPS narrowly beat expectations at $1.22, primarily due to strength in adjusted EBITDA, which grew 4.1% yr/yr to $12.8 bln. It beat out its Q1 record and marked the second consecutive quarter of growth that exceeded its expectations.
• Revenue was driven by its market leading wireless service revenue and a more than 25% increase in wireless equipment revenue. Total wireless service revenue increased 2.2% yr/yr to 20.9 bln.
• Although consumer postpaid phone net losses totaled 51,000, that is an improvement from 109,000 in the prior year period and measurably better than Q1. VZ still faces ongoing postpaid phone churn pressure, with a churn rate of 0.90%. On June 24, it launched initiatives to address the elevated churn, which includes building customer loyalty and leveraging AI.
• There are a few highlights to focus on this quarter, including fixed wireless access and core prepaid ARPU. Fixed wireless access surpassed the 5 mln subscriber milestone, keeping VZ on track to achieve 8-9 mln subscribers by 2028. Additionally, VZ said that it has reached an inflection point on core prepaid ARPU (rose above $32) and expects it to positively contribute to wireless service revenue growth for the remainder of the year.
• Given the strong adjusted EBITDA performance in the first half of the year, VZ has increased its full year guidance on adjusted EBITDA and EPS. VZ now guides for adjusted EBITDA growth of 2.5-3.5%, approximately a $125 mln increase at the midpoint. EPS guidance is now between 1-3% growth, up from 0-3%.

Overall, VZ delivered a strong quarter with healthy revenue growth and another record high adjusted EBITDA. The raised full-year guidance for EPS is also encouraging to investors. Looking ahead, AT&T (T +2.2%) and T-Mobile (TMUS +2.7%) are set to report Q2 results in the coming days and are ticking higher likely in sympathy with VZ's results. On a final note, a nice thing about VZ is that it has a frothy current dividend yield of 6.4%.

Domino's Pizza (DPZ) is slightly higher after reporting Q2 results. The pizza chain giant missed on EPS, but it also disclosed an unfavorable change of $27.4 mln in losses and gains associated with its investment in DPC Dash. As such, it appears to not be comparable to analyst expectations. Revenue rose 4.3% yr/yr to $1.15 bln, which was in-line. In the US, both delivery and carryout were positive and DPZ drove meaningful market share gains in international.

• Late in Q1, DPZ added one of the biggest new menu items in its history: Parmesan Stuffed Crust Pizza and customers love it. DPZ says the launch has gone extremely well and has met its high expectations. Most importantly, its teams are executing this more complex product very well. Customer praise for this product has been significantly higher than any of its other recent product launches. Stuffed Crust was a gap on DPZ's menu and was a big reason why customers would go elsewhere. That gap is now closed.
• Domino's Rewards was a tailwind in Q2, particularly in the carryout business. Recall that DPZ recently redesigned its loyalty program with a key goal being the growth of its carryout business. DPZ noted it has a strong slate of initiatives ready to go for the rest of the year, inclusive of its Best Deal Ever promotion, which is currently running through early August. Customers want more value in an environment where they remain pressured.
• Let's dig in a bit on US comps. At +3.4%, Q2 comps saw an acceleration from -0.5% in Q1 and that was despite lapping pretty tough +4.8% comps in 2Q24. It also broke its recent trend of declining comps: -0.5% in Q1, +0.4% in Q4, +3.0% in Q3, and +4.8% in Q2. Carryout comps were up +5.8% while delivery was +1.5%. DPZ saw improvement in both its own channel and its aggregator delivery business.
• US comps in Q2 were fueled by the Parmesan Stuffed Crust Pizza launch, which drove positive transaction counts. Also, average ticket benefited from Stuffed Crust, which carries a higher price point. International comps performed decently at +2.4%, although down from +3.7% in Q1. DPZ saw strength in Asia, fueled by continued strong commerce in India and in its Americas region, which was driven by Canada and Mexico.
• In terms of delivery, DPZ recently completed its national rollout with DoorDash (DASH), the largest aggregator in the US. This rollout went extremely well as DPZ was able to apply learnings from its prior launch with Uber (UBER). DPZ will now begin marketing on the platform with investments coming from both sides. Sales on DoorDash will build as awareness and marketing increases. DPZ expects this to be a meaningful driver to its US comp in 2H25.

Overall, this was a decent quarter for Domino's Pizza. The launch of Parmesan Stuffed Crust Pizza was a big driver of US comps, especially on the carryout side. Despite the strong Q2 US comp, DPZ only reaffirmed FY25 US comp guidance at +3%. Investors may be viewing the reaffirm as a bit of a letdown. With that said, we commend DPZ for getting with the times and partnering up with both the major delivery aggregators, this should act as a tailwind in 2H25 especially when year ago comps get easier. This should also help its struggling delivery segment.

Roper Technologies (ROP), a developer of enterprise-level software products, delivered a robust 2Q25 beat-and-raise performance, building on the momentum from its strong Q1 report on April 28, 2025. This performance reflects ROP’s ability to sustain double-digit revenue growth, with 7% organic growth and 6% from acquisitions, underscoring the pivotal role of strategic acquisitions in its growth strategy. The Q2 results were announced alongside the $800 mln acquisition of Subsplash, a provider of AI-enabled, cloud-based software and fintech solutions for faith-based organizations, which is expected to enhance ROP’s recurring revenue base and expand margins through its high-teens organic growth profile and advanced AI capabilities.

• Growth in Q2 was well-balanced across ROP’s three segments, with the Application Software segment, the largest contributor, posting the strongest yr/yr revenue growth of 17% to $1.09 bln. Key drivers for the Application Software segment’s performance likely include sustained demand for ROP’s mission-critical solutions, such as those provided by Aderant, which saw solid logo demand and customer expansion in legal software.
• Additionally, recent acquisitions like Procare Solutions and Transact Campus, integrated in 2024, have bolstered the segment’s portfolio by adding cloud-based software for education markets, contributing to both revenue growth and recurring revenue streams. The acquisition of CentralReach in April 2025, a provider of cloud-native software for autism and developmental disability care, further strengthened this segment, with expected revenue contributions of $175 mln and EBITDA of $75 mln in the 12 months ending 2Q26, driven by over 20% organic growth.
• The Network Software and Technology Enabled Products segments also contributed to ROP’s strong Q2 performance, though with more moderate growth. Network Software achieved approximately 6% yr/yr revenue growth to $385.4 mln, likely driven by steady demand for ROP’s niche software solutions in healthcare, finance, and logistics, which benefit from high retention rates and recurring revenue models.
• Meanwhile, the Technology Enabled Products segment posted approximately 10% yr/yr revenue growth to $463.3 mln, propelled by demand for specialized solutions in water, energy, and transportation markets. Acquisitions such as Syntellis Performance Solutions in 2023 likely played a role, alongside organic growth from ROP’s ability to convert end-market potential into profitable expansion through process-driven innovation.
• ROP’s rising AI capabilities are a significant tailwind for its growth, enhancing its portfolio of software and technology-enabled products across all segments. AI-driven solutions are embedded in offerings like Aderant’s legal software, which leverages AI to streamline case management and improve client outcomes, and CentralReach’s platform, which uses AI to optimize therapy workflows for autism care providers. These products contribute to ROP’s high retention rates (approximately 95% enterprise gross retention) and recurring revenue base, which exceeds 85% in its vertical software businesses, providing predictable cash flows and growth visibility.
• The Subsplash acquisition, set to close in July 2025, will further amplify ROP’s AI-driven growth by integrating Subsplash’s AI-enabled tools, which enhance engagement for over 20,000 faith-based organizations through personalized content and fintech solutions.

With back-to-back beat-and-raise performances in Q1 and Q2, ROP is on a roll, fueled by a potent combination of AI enhancements and a disciplined M&A strategy. The company’s ability to integrate high-growth acquisitions like Subsplash and CentralReach, while leveraging AI to strengthen its recurring revenue base, positions it well for sustained value creation.

American Express (AXP) delivered another quarter of robust financial performance in 2Q25, surpassing EPS expectations for the sixth consecutive quarter as Billed Business, a critical measure of card member spending, grew 7% yr/yr to $416.3 bln, a slight acceleration from the 6% growth reported in 1Q25. The growth was driven by record card member spending that underscores the resilience of the company’s younger, higher-income customer base.

Despite this strong performance, AXP opted to reaffirm its FY25 guidance of 8-10% revenue growth and EPS of $15.00-$15.50, a cautious stance that disappointed investors expecting an upward revision given the consistent EPS beats and with shares trading near all-time highs.

• The 7% growth in billed business was propelled by a balanced performance across spending categories, with Goods and Services spending rising 7% yr/yr, outpacing Travel and Entertainment (T&E), which grew at a more modest 5%. This marks a slowdown in T&E growth compared to the double-digit increases seen throughout 2023 and 1H24, a period when pent-up travel demand fueled exceptional performance in this category. Nevertheless, T&E spending remains at healthy levels, supported by AXP’s premium cardholder base, particularly in international markets.
• New card acquisitions remained a bright spot, with AXP adding 3.1 mln new proprietary cards in Q2, a testament to its strong brand appeal and targeted marketing efforts. Notably, 63% of global consumer new accounts were from Millennials and Gen Z, reinforcing the company’s success in resonating with younger, affluent consumers who are drawn to its premium, fee-based products. 
• Of the new accounts globally, 71% were on fee-paying products, highlighting the effectiveness of AXP’s strategy to prioritize high-value, premium card offerings, such as the Consumer and Business Platinum Cards, which are set to receive significant updates in the U.S. this fall.
• Credit quality continues to be a cornerstone of AXP’s financial strength, with metrics remaining best-in-class. The net write-off rate stood at 2.0%, and the 30+ days past due rate was 1.3%, both consistent with recent trends and significantly outperforming industry averages across all generations. The Federal Reserve’s recent Comprehensive Capital Analysis and Review (CCAR) results further validated the company’s robust risk management, with AXP posting the lowest projected credit card loss rate and the highest projected return on assets among banks subject to the stress test.

AXP delivered another quarter of solid results with adjusted EPS rising 17% yr/yr on record card member spending of $416.3 bln, reflecting its top-tier execution and ability to attract high-spending, premium customers. However, the decision to reaffirm rather than raise its FY25 EPS and revenue growth guidance has disappointed investors, particularly with shares recently trading at record highs, signaling expectations for a more bullish outlook.