Cliffs US sales beat estimates, turns a profit in Q1
Cliffs Natural Resources (NYSE:CLF), the largest U.S. iron ore producer, posted better-than-expected first-quarter earnings and sales, and said it continues to try selling its coal assets, as well as iron ore mines in Eastern Canada and Western Australia.
The Cleveland-based company, which sought bankruptcy protection for its Canadian operations in January, said U.S. iron-ore sales volume went up by 3.9%, but sales revenue fell 14% to $311.8 million.
The company's net loss attributable to shareholders widened to $772.6 million, or $4.26 per share, in the first quarter ended March 31, from $83.1 million, or 54 cents per share, a year earlier.
Cliffs also revised down its 2015 U.S. iron ore sales and production volume estimate to 20.5 million tons, from its previous guidance for 22 million tons, due to decreased demand from local steelmakers. During a conference call Wednesday, the company attributed the weak demand to higher steel imports.
As most of its peers, Cliffs has been struggling as a consequence of tumbling prices for iron ore and metallurgical coal, triggered by a slowdown in the Chinese steel industry. At the same time, the company has been trying to reshape itself after a board coup last summer led by hedge fund Casablanca Capital LP that ended with Lourenco Goncalves taking over as chief executive in August.
Under Goncalves direction, Cliffs began unloading non-core, higher-cost operations to focus only on its iron ore business in the U.S.
In October last year, Cliffs took a $6bn charge related mainly to the ill-timed purchase of Bloom Lake, which was supposed to supply the then-booming Chinese market.
Shares in the company were up 2.04% Wednesday to US$5.95 in pre-market trade.