DOW JONES NEWSWIRES
Cliffs Natural Resources Inc.'s (CLF) first-quarter earnings more than quintupled on benefits from a settlement with ArcelorMittal (MT, MT.AE), as well as higher pricing in each of Cliffs' business segments.
Shares in the coal and iron-ore producer were up 2.3% at $98.78 after hours. Through the close, the stock has risen 38% in the last year.
Earlier this month, Cliffs and ArcelorMittal (MT, MT.AE) settled disputes over pricing and iron pellets. Thursday, the company said the settlement resulted in Cliffs recognizing about $140 million in additional revenue in the latest period. It also had a $54 million favorable impact on cost of goods sold.
The company's earnings have been soaring in recent quarters as both sales volumes and prices climb. It has predicted iron-ore prices will remain high in the near term, thanks to strong demand from China and dim prospects for new output capacity.
At the North American iron ore operations--which account for the largest share of revenue--sales volumes fell 19%, as revenue per ton from product sales and services rose 36% excluding settlement effects.
The company posted a profit of $423.4 million, or $3.11 a share, up sharply from $77.4 million, or 57 cents a share, a year earlier. Revenue climbed 63% to $1.18 billion. Analysts surveyed by Thomson Reuters predicted earnings of $2.22 a share on revenue of $1.4 billion.
The company now sees North American iron-ore sales volume totaling 29 million tons this year, up 1 million from its February view because of increased demand.
Early this year, Cliffs agreed to buy Consolidated Thompson Iron Mines Ltd. (CLM.T) for about C$4.9 billion ($5.15 billion). The company has said it expects the deal, which will expand its share of the global iron-ore market, to close early in the second quarter.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; firstname.lastname@example.org