So 5% allows them to spend the money of the 95% to cover their proxy expenses? Boy you sure look at things backwards. Now if you were ask me if CLF's management and Casablanca should pay for these proxy expenses, then in that case I would agree with you. But if Casablanca is voted in, they will charge the shareholders for their inflated cost.
with all of the gains in Q2 was from US iron ore as all other divisions saw more sales than production. US steel production YTD in the Great Lakes area has now passed last years numbers so expect iron ore demand to pull this inventory down. Going forward, CLF is sitting to increase profit levels. Institutions are in a position to see this and may stay the course with CLF management if they can prove they are headed in the right direction.
Waiting for conference call for any announcements, if nothing new, then I may vote CAS on Monday if management can't justify their direction. I still like the results for Q2 as iron ore prices were lower than Q1 and they beat Q1 by a large margin. The inventory build in US iron ore kept them from posting a 50 cent profit.
At some point iron ore shipments have to match steel production as they are connected. June iron ore shipments were at 5 year highs on the Great Lakes.
And if CAS gets in, expect another $5 million charge to reimburse them for their proxy cost. You really don't get it do you.
A loss of 1 cent is not that bad! US ore sales down and demand is increasing, CLF needs to reduce production levels to use up their huge inventory build. Canadian cost have now moved to be cash positive which allows CLF to make money while continuing operations. And Asia Pacific is still making profits after DD and A charges. Past impairment charges is generating tax benefits and will continue to be positive for CLF years to come.
Other than the cash charges against earnings, most of those will disappear when CLF sells off Wabush.
Finally, underground coal mining needs to be sold off.
I think CLF has made a good case to the institutional holders to keep the current management as they have posted a good quarter during difficult times. And 1 cent loss is much better than the 55 cent loss earlier.
Iron ore will be headed over $100 soon and I agree with Vale projections of it moving to $110 in the near future. With Canadian iron ore cash cost of $87 a ton, there is no need to fire sale Bloom Lake. Wabush on the other hand has to go and it appears they are moving in that direction. Coal needs to go, the only coal operation that CLF should consider is open pit mining and since they only have underground, they should get rid of all of it.
William, many of us expected earnings to be released tomorrow and it was just by chance I came in and pulled up this site when the cable guy showed up to fix my connection. But at first glance, I see more positives about this earnings report than negative. Lower cost per ton, revenue held up over $100 per ton, continued inventory build. On the negative side, it was a loss, more charges against earnings and disappointing coal operations. But all in all, it was a good report, not a blow out great report.
The only thing left is to figure out who the institutions will vote in. CAS offers a change that is unknown and CLF offers a direction that is moving in the right direction based on the results. This one is not clear cut.
That reflects the impairment charges of past which allows them to pull those losses forward. Expect to see those tax benefits in the future off the $1 billion plus charge they took in 2013 tax year.
and my 14 cent profit would have been right on if not for the Wabush charge and the increased DD and A charges.
On a positive surprise is the reduction of the Canadian Ore cost to produce. At the current levels, CLF should produce and ship the maximum amount to cut their rail charge off.
CLF had a Loss of 1 cent, you all did not hit the target!
My estimates of a profit of 14 cents was off just about as much as you are that had estimates of minus 15 cents.
There are many good points that have come out of earnings and the biggest one is reduction of Canadian Iron Ore Cost per ton from the $120 range to the $80 level which generates positive cash from continuing operations. This is really a big deal as it takes off the need to sell the assets or if they want to sell it, the lower cost makes the asset more valuable.
In any case, everyone missed their targets as CLF beat the average estimates and came in between the high and low estimates. Could that be by design?
CLF has lowered Bloom Lake's cost to the point at $90 iron ore prices and you deduct depreciation, depletion and amortization charges, they are generating cash from continuing operations. As long as they are positive, there is no point in selling the operations while iron ore prices are low.
Coal on the other hand is a continuing problem and should be sold off.
And CLF did beat average analyst estimates...
With all the charges against earnings and the increase DD and A charge, the results were good. Would have liked to see a draw down in inventories, but I was pleased to see the Bloom Lake cost are down below $90 a ton. Will see where the market takes it tomorrow, but it was an earnings beat!
Just got in, thought earnings were to released tomorrow morning. Continued inventory build when I expected an inventory draw. That inventory build ate up any chance of profits as it took $40 million in cash plus some more from the credit facility to pay for current production cost.
Considering all the extra charges, the 1 cent loss was not all that bad. I would have liked to see them hit the 14 cent profit level but the added DD and A charge was a little over $1 more per ton. Just that charge alone would have taken them to a 15 cent profit.
I don't see where the earnings were that bad but they were not great. Will it be enough to let management keep their jobs, I don't know, depends on the institutional holders. But I guess I will have to send in the Gold card as they didn't hit the 14 cent threshold. Not because the earning were bad, just because CLF's management did not handle these results properly and should have been out front of this two weeks ago.
They need the iron ore before they can produce the steel…
All ore shipments are FOB a specific port, the steel mills pay to have it delivered directly to their plants.
Furthermore, they had one bad quarter in the last 5. And if you looked carefully at the financial statement , the bottom line numbers were good. Shorts just worked the media better and CLF did not work the media at all.
I watch steel production. Short term iron ore prices do not factor in due to the long term contracts that CLF has. If iron ore averages below $100 for a year, then we would have a problem. I also watch iron shipments on the Great Lakes and make sure the increase or decrease matches steel production on the Great Lakes. As in April, ore shipments on the Lakes was low, yet steel production in the area was up, that tells me they got ore in via rail and you are seeing solid earnings in the rails that reflect this demand. If steel production was falling, I would not be optimistic, simple as that.
You may want to look at steel production in the Great Lakes area, they have currently made up the shortfall from Q1 and now 2014 YTD is ahead of 2013, They can't produce steel without iron ore, so they must have brought in ore on rail in April.