Tags: Iron | ore | Cliffs | Profit

Iron-ore Producer Cliffs Profit Beats Estimates

Wednesday, 24 Apr 2013 08:29 PM

Cliffs Natural Resources Inc., the largest U.S. iron-ore producer, reported first-quarter earnings that beat analysts’ estimates after it idled some mines to reduce operating costs.

Net income fell to $107 million, or 66 cents a share, from $375.8 million, or $2.63, a year earlier, the Cleveland-based company said in a statement today. Excluding a 6-cent tax benefit, per-share profit exceeded the 33-cent average of 18 estimates compiled by Bloomberg. Sales declined 5.9 percent to $1.14 billion, falling short of the $1.18 billion average of 13 estimates.

In the past six months Cliffs has idled some production at mines in Michigan and Minnesota, cut its dividend by 76 percent and sold equity and depositary shares to raise $995 million after the price of iron ore slumped. The company also announced in November it would postpone the expansion of its Bloom Lake mine in Canada.

“When the wind changed, these guys adjusted the sails,” Laurence Balter, an analyst at Oracle Investment Research in Fox Island, Washington, said in a phone interview today. “The cost decreased and average iron-ore prices increased. That’s exactly what you want.”

Cliffs cost of goods sold and operating expenses in its U.S. iron-ore division fell 8 percent to $252.8 million while its cash cost per ton at U.S. mines fell by 1.6 percent. Per-ton cost at its Eastern Canadian division dropped 4.4 percent to $99.41 a ton, the company said in the statement.

Sales Outlook

The company raised its U.S. sales outlook to 21 million tons from a previous estimate of 20 million tons as it sees blast furnace steel output in the U.S. and Canada of 40 to 45 million tons at $630 a ton, down from an earlier estimate of $650.

Cliffs’ coal sales volume rose 27 percent to 1.79 million tons compared with 1.41 million a year earlier after the Oak Grove mine recovered from 2011 storm damage.

The earnings were released after the close of regular trading on U.S. markets. Cliffs has dropped 73 percent in the past 12 months, the worst performer on the Standard & Poor’s 500 Index. The shares rose 5 percent to $19.13 at 5:39 p.m. in New York.

Cliffs has scheduled an earnings conference call for 10 a.m. New York time Thursday.

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
Companies
Cliffs Natural Resources Inc., the largest U.S. iron-ore producer, reported first-quarter earnings that beat analysts' estimates after it idled some mines to reduce operating costs.
Iron,ore,Cliffs,Profit
373
2013-29-24
Wednesday, 24 Apr 2013 08:29 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved