Cliffs Natural Profit Fell Sharply but Beat Estimates
July 28 2016 - 11:54AM
Dow Jones News
By Austen Hufford
Cliffs Natural Resources Inc. posted revenue and profit
declines, but beat analyst expectations as the iron-ore miner
continues to face low prices.
Cliffs has been hurt by weak demand from steelmakers, which have
been grappling with low prices amid a glut of supply and a high
level of less expensive imports.
Cliffs, one of the country's biggest mining companies, has
continued to streamline its operations with the hope that iron-ore
prices will recover in time to stave off bankruptcy. Selling,
general and administrative expenses fell 27% to $22.5 million.
Net debt decreased to $2.3 billion from $2.6 billion last
year.
Chairman and Chief Executive Lourenco Goncalves said Thursday
that Cliffs signed deals in the quarter that are "essential" to
future growth, including a multiyear supply agreement with
steelmaker ArcelorMittal, a low-cost power agreement in Minnesota
and a supply deal with new customer U.S. Steel Canada Inc.
For the quarter, Cliffs Natural reported a profit of $12.8
million, or 7 cents a share, compared with year-earlier profit of
$60.2 million, or 39 cents a share. Revenue fell 0.4% to $496.2
million.
Analysts polled by Thomson Reuters expected per-share profit of
2 cents and revenue of $464.8 million.
The company reaffirmed its 2016 capital spending guidance of $75
million.
Shares, up 48% in the past three months, rose 1.9% to $8 in
morning trading.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
July 28, 2016 11:39 ET (15:39 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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