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Cliffs Natural Resources Declares Leadership Promotions

Zacks Equity Research

Cliffs Natural Resources Inc. CLF has announced some executive leadership promotions that will be effective Jan 1, 2017.

The company announced that P. Kelly Tompkins will take the responsibility of Executive Vice President & Chief Operating Officer. Tompkins will oversee the U.S. Iron Ore and Asia Pacific Iron Ore Operations, as well as the Commercial and Business Development functions. Before being appointed as Executive Vice President and Chief Financial Officer at Cliffs, Tompkins served in executive vice president roles in business development, commercial, legal and government affairs.

The company also announced that Timothy K. Flanagan will take the position of Executive Vice President, Chief Financial Officer and Treasurer. Flanagan has held a number of financial leadership roles since joining Cliffs back in 2008, most recently being responsible for the accounting, reporting, treasury, financial planning and analysis functions. Further, Flanagan previously served as the Assistant Controller and Director of Internal Audit.

Cliffs has outperformed the Zacks categorized Mining-Iron industry in the past three months. The company’s shares have gained around 74.6% in this period, compared with a 68.7% gain recorded by the industry.

Cliffs remains focused on de-leveraging its balance sheet and improving its cost structure. Further, the company is focusing on cost management, evident from a decline in overall cash costs for the first nine months of 2016.

Moreover, the company’s total debt fell around 4% year over year to $2.7 billion at the end of 2015 and further reduced to $2.2 billion at the end of third-quarter 2016. The company redeemed all of its outstanding senior notes due in Jan 2018 in the most recent quarter, reducing its interest expense by $17 million a year. Cliffs’ sustained commitment to reduce debt will further lower its interest expenses.

Moreover, the company should benefit from its pellet supply contracts with its U.S. iron ore customers which will help it mitigate the impact of fluctuation in seaborne iron ore pricing.

Zacks Rank & Key Picks

Cliffs currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies in the basic materials space include Denison Mines Corp. DNN, Vale S.A. VALE and Fission Uranium Corp. FCUUF, all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Denison Mines has an expected earnings growth rate of 71.4% for the current year.

Vale has an expected earnings growth of 341.4% for the current year.

Fission Uranium has an expected earnings growth rate of 25% for the current year.



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