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MESABI TRUST (MSB)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY2026 delivered $5.42M revenue*, $4.74M net income*, and $0.36 EPS*, reflecting a year-over-year decline versus Q2 FY2025 ($6.25M revenue*, $5.40M net income*, $0.41 EPS*) but a sequential improvement from Q1 FY2026 ($4.35M revenue*, $3.63M net income*, $0.28 EPS*) [*].
  • Wall Street consensus for EPS and revenue was not available via S&P Global for Q2 FY2026; no beat/miss determination can be made [*].
  • Trustees reiterated uncertainty around Cleveland-Cliffs’ Northshore operations and macro/steel-cycle headwinds; a $0.34/unit distribution was declared for November 20, 2025, down from $0.39/unit the prior year, reflecting lower royalties and prudent reserves .
  • Prior commentary highlighted Q2 FY2025 shipments credited by Cliffs at 924,442 tons; royalty volumes and prices drive variability and remain subject to adjustments and operational decisions by Cliffs .
  • Near-term stock catalysts: subsequent royalty reports, any Northshore operating updates from Cliffs, and distribution determinations amid iron ore/steel price volatility and trade/tariff dynamics .

What Went Well and What Went Wrong

What Went Well

  • Sequential recovery: Revenue rose to $5.42M* and EPS to $0.36* from $4.35M* and $0.28* in Q1 FY2026, with net income margin improving to ~84.6%* from ~76.7%* [*].
  • High-margin royalty model: Net income margin remained structurally high (~84.6%) given minimal operating costs at the trust level [].
  • Prudent cash stewardship: Trustees explicitly considered lower royalty inflows, lack of Northshore visibility, and need to maintain reserves when setting distributions, supporting sustainability under uncertainty .

What Went Wrong

  • Year-over-year softness: Revenue down to $5.42M* from $6.25M* and EPS to $0.36* from $0.41* versus Q2 FY2025, reflecting iron ore cycle and shipment dynamics [*].
  • Visibility remains limited: Trustees reported “no specific updates on Cliffs’ plans” for Northshore, and royalty pricing remains subject to change and adjustments, constraining forward visibility .
  • Macro/trade headwinds: Trustees cited iron ore/steel volatility, economic uncertainty, and tariff/duty dynamics as ongoing risks to royalty receipts and distribution capacity .

Financial Results

Headline Metrics vs Prior Periods

MetricQ2 2025Q4 2025Q1 2026Q2 2026
Revenue ($)6,254,719*5,841,807*4,349,472*5,416,904*
Net Income ($)5,397,894*6,067,040*3,631,208*4,743,882*
Diluted EPS ($)0.4114*0.4624*0.2768*0.3616*
EBIT Margin (%)83.17*89.76*76.70*84.61*
Net Income Margin (%)83.17*88.53*76.70*84.61*
Cash from Operations ($)3,805,959*9,411,185*2,080,661*4,375,266*
  • Note: Columns are ordered oldest → newest.
  • Values retrieved from S&P Global.*

Q2 FY2026 Actuals vs Estimates

MetricActualConsensusSurprise
Revenue ($)5,416,904*n/an/a
EPS ($)0.3616*n/an/a
  • Wall Street consensus estimates were not available via S&P Global for Q2 FY2026.*

Segment Breakdown

  • Not applicable. Mesabi Trust is a royalty trust dependent on Cleveland-Cliffs’ Northshore Mining operations; it does not report operating segments .

KPI Snapshot (Context)

KPIQ2 2025Q1 2026Q2 2026
Tons shipped credited by Cliffs924,442 n/an/a
Base royalty credited ($)2,514,060 n/an/a
Bonus royalty credited ($)2,588,784 n/an/a
Total royalty payment to Mesabi ($)5,300,287 n/an/a

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal financial guidanceFY2026NoneNoneMaintained (no formal guidance)
Distribution per UnitPayable Nov 20, 2025$0.39 (prior-year comparable period)$0.34Lowered
  • Trustees explicitly cited uncertainty, royalty variability, and need to maintain reserves in setting distributions; no quantitative revenue/earnings guidance provided .

Earnings Call Themes & Trends

  • No earnings call transcript located for Q2 FY2026; Mesabi Trust typically communicates via press releases and 8-K royalty report summaries .
TopicPrevious Mentions (Q4 FY2025)Previous Mentions (Q1 FY2026)Current Period (Q2 FY2026)Trend
Northshore operations visibilityTrustees planned to file royalty report summaries; distribution decisions consider uncertainties (Oct 10, 2025 PR) Trustees reported Q2 CY2025 shipments; no specific updates on Cliffs’ plans; pricing subject to change No new specific updates disclosed; continued emphasis on uncertainty Steady uncertainty
Tariffs/macro/steel volatilityHighlighted as factors in distribution decision (Oct 10, 2025 PR) Cited as risks affecting royalties and distributions Ongoing headwinds noted in communications Persistent headwinds
Royalty pricing/adjustmentsNoted that royalties may be based on prices subject to interim/final adjustments Royalty calculations based on prices subject to change Continued acknowledgement of pricing adjustments’ impact Persistent risk factor

Management Commentary

  • “The Trustees…declared a distribution of thirty-four cents ($0.34) per Unit… This compares to a thirty-nine cents ($0.39) per Unit distribution declared for the same period last year… [and] reflects… total royalty payments of $5,300,287 on July 30, 2025… and [the] determination to maintain an appropriate level of reserves…” .
  • “The Trustees have received no specific updates on Cliffs’ plans for the current year concerning Northshore iron ore operations or Northshore’s production, sale or shipment of iron ore products.” .
  • “The royalties paid to Mesabi Trust are based on the volume of iron ore pellets… and the pricing of iron ore product sales… Cliffs’ Royalty Report also indicated that royalty calculations are based on prices that are subject to change.” .

Q&A Highlights

  • No analyst Q&A located for Q2 FY2026; the Trust did not provide an earnings call transcript in available sources .

Estimates Context

  • S&P Global consensus estimates for Q2 FY2026 (EPS and revenue) were unavailable; as such, no beat/miss assessment can be made [*].
  • Given the royalty structure and limited sell-side coverage, model updates will likely focus on realized tonnage and pricing once subsequent royalty reports are filed .

Key Takeaways for Investors

  • Results reflect the royalty model’s inherent volatility: Q2 FY2026 recovered sequentially but remained below prior-year levels; distributions and earnings will hinge on Cliffs’ shipment volumes and realized pricing [*] .
  • No guidance and limited visibility: Trustees continue to cite uncertainty and lack of specific updates from Cliffs on Northshore operations—maintain a wider range of outcomes in near-term forecasts .
  • Distribution sensitivity: The $0.34/unit November 2025 payout (down from $0.39) underscores conservative reserve management and variability in royalties; future distributions may fluctuate with subsequent royalty reports .
  • Monitoring priorities: Track Cliffs’ operational cadence, Great Lakes shipping seasonality, and iron ore/steel price trajectories; royalty calculations are subject to change and adjustments .
  • Trading implications: Absent guidance/estimates and given variability, the equity can gap on new royalty disclosures or distribution announcements; positioning ahead of 8-K royalty updates may drive near-term moves .
  • Medium-term thesis: Exposure to domestic pellet demand via Cliffs with minimal operating overheads supports high margins, but concentration risk and macro/trade exposures elevate earnings/distribution volatility [*] .

Data notes:

  • Fiscal calendar: Mesabi Trust’s Q2 FY2026 corresponds to the quarter ended July 31, 2025 (trust fiscal year convention).
  • All starred figures (*) are Values retrieved from S&P Global.

Sources and citations:

  • Q1 FY2026 8-K Royalty Report summary and risk factors .
  • Distribution press releases and context .