Cliffs Natural Resources Inc. Earnings Cheat Sheet: Beats Wall Street Expectations

The Cheat Sheet

S&P 500 component Cliffs Natural Resources Inc. reported net income above Wall Street’s expectations for the third quarter. Cliffs Natural Resources is an international mining company that operates primarily in North America and Australia.

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Cliffs Natural Resources Earnings Cheat Sheet for the Third Quarter

Results: Net income for Cliffs Natural Resources Inc. rose to $589.5 million ($4.07 per share) vs. $297.4 million ($2.18 per share) in the same quarter a year earlier. This marks a rise of 98.2% from the year earlier quarter.

Revenue: Rose 59.2% to $2.14 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CLF reported adjusted net income of $4.54 per share. By that measure, the company beat the mean estimate of $3.66 per share. Analysts were expecting revenue of $2.16 billion.

Quoting Management: Joseph Carrabba, Cliffs’ chairman, president and chief executive officer, said: “The execution of our growth and diversification strategy is on track and continues to gain momentum, despite the recent volatility in equity markets. With the combined contributions from our recently acquired Bloom Lake Mine, healthy demand for our products and a favorable pricing environment, we reported the most profitable quarter in our Company’s history. Relatively high seaborne iron ore pricing, increased year-over-year steel production in Asia and a stable market in North America all continue to support our strategically targeted expansion and growth initiatives.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 70%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose more than twofold from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 56.4% and in the first quarter, the figure rose more than fourfold.

The company topped expectations last quarter after falling short of forecasts in the second quarter with net income of $3 versus a mean estimate of net income of $3.72 per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $3.82 a share to $3.80 over the last ninety days. At $13.46 per share, the average estimate for the fiscal year has fallen from $14.37 ninety days ago.

Competitors to Watch: Vale , ArcelorMittal , Consolidated Thompson Iron Mines Ltd. , Anglo American plc (AAUKY), Great Northern Iron Ore Properties , AK Steel Holding Corp. , BHP Billiton plc , BHP Billiton Limited , United States Steel Corp. , and Mesabi Trust .

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(Source: Xignite Financials)

 

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