Cliffs Natural Resources Q1 Earnings Tops Street’s Estimates But Revenue Fall Slightly Short of Expectations (CLF)
Iron ore mining company, Cliffs Natural Resources Inc. (NYSE: CLF) said on Wednesday that fiscal first quarter profit slumped 74% as weakness in iron-ore sales pit pressure on revenue while reduced tax benefits also weighed on the bottom line.
However, shares climbed about 4.30% in aftermarket hours as earnings edged past Street’s estimate.
Addressing analysts during earnings call, Cliffs Natural Resources’ Chief Executive said that the Company, in the recently concluded quarter adopted “deliberate measures” to reduce its balance sheet leverage, lower operating costs and enhance its cash position, adding that business “headed in right direction” in the current fiscal.
The Company’s top line and bottom line have come under pressure in the recent past owing to weakness in iron prices, drop in sales-volume and increase in costs. As a result, the Company was forced to postpone some of its projects. For instance, it postponed some of its project work in Quebec (Bloom Lake mining expansion) and halted production activities in two for its mines in the U.S. Moreover, slowdown in China also heavily undermined company’s financials.
For the quarter, the Company reported net income of $97.1 million or 66 cents a share, compared to a profit of $375.8 million or $2.63 a share, in the year-earlier quarter. Excluding onetime items, adjusted earnings came at 60 cents a share down from 89 cents a share. Revenue fell 5.9% to $1.14 billion. Sales-volume of iron ore fell 10% in the fiscal first quarter.
Analysts’ consensus estimate was for earnings of 34 cents a share on revenue of $1.2 billion, according to a data compiled by Thomson Reuters.
Income tax benefits declined 97% to $6 million.
Sales volume of iron ore declined 8.8% in the U.S. while it fell 17% in the Asia-Pacific. Sale volume of coal climbed 27% in North America.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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