🕟 Steeling the show

Good Afternoon. On October 19, 1987, the Dow fell 22.6% in a single session on Black Monday. The crash became a reminder that market prices and confidence can change far faster than the businesses behind them.

Today’s reports take us inside those businesses. Cleveland-Cliffs has returned to profit, Werner is absorbing higher costs, and China’s factories are outpacing its shoppers. We’re following what turns activity into earnings, with a careful eye on which improvements have arrived and which still depend on forecasts.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

🔢 Big number: $612 million — Cleveland-Cliffs’ third-quarter adjusted EBITDA, up from $286 million in the preceding quarter.

Cleveland-Cliffs is back in the black. The steelmaker reported a $165 million third-quarter profit, reversing a $134 million loss in the preceding quarter. Revenue rose to $5.6 billion from $5.2 billion, with prices, shipment volumes and production costs all improving sequentially.

The news: Adjusted earnings before interest, taxes, depreciation and amortization reached $612 million, more than twice the second quarter’s $286 million. Management credited a stronger domestic trade environment, reduced imports and customers’ preference for reliable local supply. The company shipped 4.2 million net tons of steel; automotive customers, distributors and infrastructure users remain important sources of sales. This recovery has several moving parts, so a higher selling price alone doesn’t explain the improvement.

What’s next: Management expects roughly $715 million of adjusted EBITDA next quarter, despite seasonal pressure and maintenance outages. It also says 2027 adjusted EBITDA could exceed $4 billion, based on signed contract changes and prevailing price forecasts. Those are expectations, rather than earned profits. The next check is whether stronger pricing becomes cash flow and the promised debt reduction.

Source: Cleveland-Cliffs

Fifth Third’s larger banking franchise is starting to show more earning power. The bank reported $828 million of third-quarter net income available to common shareholders, up from $763 million in the previous quarter. Reported diluted earnings were 90 cents a share; adjusted earnings were $1.13 after excluding specified items.

The news: The Comerica systems conversion is complete. Management says the combined company has retained clients and bankers while securing the full $850 million annual expense-savings run rate for the fourth quarter. Net interest income increased roughly 3% sequentially. Core deposits also grew 3%, giving the bank a larger funding base. The acquisition changes the company’s size, so year-over-year growth needs to be read alongside the sequential operating figures rather than treated entirely as organic expansion.

Big picture: A merger earns its keep when the remaining organization can serve customers at a lower cost without losing their business. Fifth Third’s next quarter will test how the savings show up after conversion. Credit deserves equal attention: net charge-offs were 31 basis points, and stable loan performance matters as much as trimming duplicate expenses.

Source: Fifth Third

Werner’s trucks can bring in revenue without bringing in much profit. The transportation company’s preliminary third-quarter update puts revenue at $946 million–$951 million, with reported diluted earnings of just 10–11 cents a share. Adjusted diluted earnings are expected to be 15–16 cents.

The news: Werner identified approximately 18 cents a share of cumulative cost pressure relative to the second quarter. It cited rising fuel prices, spending to recruit and retain drivers, and a late-quarter increase in insurance reserves for past claims. These costs arrive through different channels: fuel affects current operations, employee investment supports staffing, and reserve changes revise estimates tied to older incidents. They shouldn’t all be read as evidence that customers shipped less freight.

Bottom line: The preliminary revenue range doesn’t answer how much of each sales dollar survives after operating costs. Werner plans to report full results October 27 after the market closes. That release should give readers the additional detail needed to judge the quarter. Until then, the company’s update establishes the earnings pressure, not a complete explanation of pricing, shipment demand or future margins.

Source: Werner Enterprises

TTM Technologies agreed to buy MKS’s Ophir Optics business for approximately $650 million in cash. The proposed purchase adds precision infrared imaging and laser-optics capabilities used in defense, security and industrial applications. It isn’t a purchase of every operation carrying the Ophir name.

The news: The business has production facilities in Israel and Romania. Its products span optical components and assemblies through camera integration, fitting beside TTM’s existing mission systems, radio-frequency components and advanced interconnect products. The agreement excludes MKS’s separate Ophir Instruments laser-characterization business and the Ophir brand. TTM expects to fund the transaction, together with an already announced $400 million Asian capacity expansion, through cash, future cash flow and its existing revolving credit facility.

What’s next: Closing is expected in the second quarter of 2027, subject to regulatory approvals and other conditions. TTM expects the purchase to improve adjusted EBITDA margin and non-GAAP diluted earnings immediately after closing. The practical questions are how much financing is needed and how smoothly the new capabilities join the existing business. An agreement adds a plan; closing and integration have to deliver its financial benefits.

Source: TTM Technologies

Central Garden & Pet has a new name in its garden portfolio: Burpee. The company announced the acquisition of the 150-year-old seed and young-plant brand today. The transaction actually closed September 30; today’s announcement shouldn’t be mistaken for a new closing date.

The news: Burpee sells seeds, plants and gardening supplies through retail stores, online channels and catalogs. Central points to the brand’s consumer relationships and digital capabilities as reasons for the purchase. Burpee will remain a separate business based in Pennsylvania, with chief executive Jamie Mattikow continuing to lead it. That preserves the existing team while putting the company inside a larger consumer-goods organization with manufacturing and logistics resources.

Big picture: The attraction is a recognized gardening brand with established routes to customers. The financial payoff still needs numbers. Central says it will provide more acquisition detail on its fiscal fourth-quarter and year-end earnings call. Watch for the purchase economics and how the business contributes to the garden segment, rather than assuming a famous name automatically improves margins. The announcement explains the strategic fit; the next disclosure needs to explain the return.

Source: Central Garden & Pet

China’s economy grew 4.5% from a year earlier in the third quarter, improving from 4.3% in the second. On a seasonally adjusted basis, GDP increased 1.2% quarter over quarter. The headline is firmer, but the underlying demand picture remains uneven.

The news: September industrial output increased 5.5% year over year, while retail sales of consumer goods rose just 1.1%. Investment remains the weak point: fixed-asset investment fell 7.2% over the first nine months, including a 20.6% decline in property-development investment. These figures cover different periods and activities, so they aren’t pieces that can simply be added together. They do show why one GDP growth rate doesn’t describe every business’s experience.

Bottom line: This is a broader economic update than last week’s trade release. Factories and exports can support growth while households and property developers remain cautious. The next useful sign of a more balanced expansion would be stronger domestic spending and investment, rather than another large export total alone. Companies selling to Chinese households face a different demand test from manufacturers serving overseas customers.

Source: National Bureau of Statistics of China

Mowi’s salmon business delivered a bigger harvest and stronger operating earnings. The Norwegian producer’s trading update reported 186,000 tonnes harvested in the third quarter, a quarterly record, compared with 166,000 tonnes a year earlier. Its largest production source was Norway.

The news: Preliminary operational EBIT reached €275 million, up from €112 million in the prior-year quarter. Blended farming cost fell to €5.11 per kilogram from €5.42, with the company putting the cost reduction at €51 million. Harvest growth and lower unit costs both matter: selling more fish doesn’t automatically make each kilogram cheaper, so the separate cost figure helps explain the earnings improvement. Results also varied by production region, rather than every operation delivering the same margin.

What’s next: Mowi will publish its full third-quarter report November 4. That’s the next opportunity to read the harvest, costs and balance sheet together; reported net interest-bearing debt was approximately €2.9 billion, excluding lease-accounting effects. Today’s operational EBIT is a non-IFRS operating measure, not net profit or cash generated. The full report will help show how much of the operating improvement reaches those other financial lines.

Source: Mowi

Germany’s Merck KGaA agreed to acquire London-based Silence Therapeutics in a cash transaction valuing its equity at approximately $1.3 billion. The price is $20 per American depositary share, a 130% premium to Friday’s closing price. This is the German group, separate from the U.S. drugmaker with a similar name.

The news: Silence develops medicines using small interfering RNA, a technology designed to reduce the production of specific proteins. The company’s lead program, divesiran, is being developed for polycythemia vera, a rare blood cancer. Silence says the agreement follows Phase 2 results and would place the program with an organization capable of supporting its next development stage. A planned clinical program is still different from an approved treatment or an established stream of drug sales.

Big picture: Merck is paying for development prospects and scientific capabilities. The announcement puts enterprise value at approximately $1.1 billion, a different measure from the amount assigned to shareholders’ equity. Shareholders receive the agreed cash only if the transaction completes under its conditions. Separating the purchase price, clinical progress and closing requirements keeps three different sources of uncertainty from disappearing inside one large deal headline.

Source: Silence Therapeutics

Q: Why was the stadium so cool?

A: It was filled with fans.

Cyclical stock: A share in a company whose earnings tend to rise and fall with the business cycle.

In a sentence: Cleveland-Cliffs’ recovery shows how pricing, demand and costs can change a cyclical stock’s earnings outlook.

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