Post-Earnings Analysis - Cliffs Natural Resources

LONDON, November 13, 2014 /PRNewswire/ --

Investor-Edge.com has issued free post-earnings analysis on Cliffs Natural Resources Inc. (NYSE: CLF). On October 27, 2014, the company reported its financial results for Q3 FY14 (period ended September 30, 2014). Click on www.investor-edge.com/FreeReports to read our free earnings review on Cliffs Natural Resources Inc. During Q3 FY14, the company's net debt reduced $100 million on a sequential basis and its cash cost per ton rate improves across all business segments compared to Q2 FY14. Our free coverage report can be accessed at:

www.investor-edge.com/register

Earnings Overview 

During Q3 FY14, Cliffs Natural Resources reported consolidated revenues of $1,298.2 million, compared to $1,546.6 million in Q3 FY13. The company's consolidated revenues during the reported quarter outperformed Bloomberg analysts' forecast of $1,275.0 million. Further, the company's lower revenues during Q3 FY14 were primarily due to a 32% reduction in market pricing for iron ore and a 17% reduction in market pricing for metallurgical coal. The free research on CLF can be downloaded as in PDF format at:

www.Investor-Edge.com/CLFFreeReport

Cliffs Natural Resources' sales margin decreased to $127.5 million in Q3 FY14 from $348.7 million in Q3 FY13. Furthermore, the company recorded a net loss attributable to common shareholders of $5,892.4 million, or $38.49 loss per diluted share, in Q3 FY14, compared to net income of $104.3 million, or $0.66 per diluted share, in Q3 FY13. Analysts from Bloomberg had expected the company to report net loss of $2.86 million, or $0.19 per diluted share, in Q3 FY14.

Excluding impairment charges and other items, the company's adjusted net income narrowed to $32.7 million, or $0.21 per diluted share, in Q3 FY14, from $144.4 million, or $0.88 per diluted share, in the year-ago quarter. Further, adjusted EBITDA for Q3 FY14 decreased 45% to $233.3 million, from $423.5 million in Q3 FY13. The company had $244.0 million of cash and cash equivalents at the end of Q3 FY14, compared to $298.8 million at the end of Q3 FY13. Sign up and read the free analyst's notes on CLF at:

www.Investor-Edge.com/CLF-13112014

Lourenco Goncalves, Chairman, President and CEO of Cliffs Natural Resources Inc., stated that the company's core business, United States Iron Ore (USIO), demonstrated remarkable strength in Q3 FY14 as it continues to generate more EBITDA than the company on a consolidated basis. He informed that the company's USIO and Asia Pacific Iron Ore (APIO) businesses generated a combined adjusted EBITDA of $295 million. Mr. Goncalves added that despite continued cost cutting progress at Bloom Lake, Phase I is not feasible; however, by end of 2014, the company expects to have a solution for Bloom Lake.

In its outlook for USIO, Cliffs Natural Resources is expecting FY14 sales and production volume of 22 million tons of iron ore pellets and has maintained pellet cash-cost-per-ton expectation of $65 to $70. For Eastern Canadian Iron Ore, the company's sales and production volume expectation for Bloom Lake mine is 6.5 million tons, with cash-cost-per-ton expectation of $80 to $85 for FY14. For APIO, the company is expecting FY14 sales and production volume of approximately 11 million tons, but has lowered its cash-cost-per-ton expectation to $50 to $55 from its previous expectation of $55 to $60. For North American Coal outlook, the company is maintaining its FY14 expected sales and production volumes of 7 million tons, with revenues-per-ton outlook of $75 to $80. Visit Investor-Edge and access the latest research on CLF at:

www.Investor-Edge.com/CLFEarningsCoverage

Cliffs Natural Resources has lowered its selling, general and administrative expense expectation to approximately $165 million for FY14, from its previous expectation of $185 million, which excludes severance, change in control and proxy-contest-related costs of approximately $45 million. The company is expecting capital expenditures for FY14 to be at the lower end of the previously reported guidance range of $275 to $325 million and consolidated FY14 depreciation, depletion and amortization to be approximately $485 million. The company has also lowered its FY14 cash outflows expectation for exploration to $10 million, from its previous expectation of $15 million.

Stock Performance 

On the day following the earnings release, October 28, 2014, Cliffs Natural Resources' stock surged 22.19%, and ended the session at $11.29. The stock has witnessed mostly negative movements since then, and on the last close, Wednesday, November 12, 2014, the stock finished at $10.71, up 0.94%, after vacillating between $10.47 and $11.30. A total of 6.34 million shares were traded, which was much below its three months average volume of 10.80 million shares. Over the previous three sessions and from the beginning of 2014, the company's shares have fallen by 4.12% and 59.14%, respectively. However, the stock has gained 46.31% over the last one month. Cliffs Natural Resources' shares closed below their 50-day and 200-day moving averages of $11.07 and $15.95, respectively. Furthermore, the stock has a Relative Strength Index (RSI) of 51.85.

Sneak Peek to Corporate Insider Trading 

In the last one month, there was one insider transaction made by John T. Baldwin, Director at Cliffs Natural Resources Inc. On October 29, 2014, Mr. Baldwin bought 9,800 shares of the company at a price of $10.18 per share. Complimentary in-depth research on CLF is available at:

www.Investor-Edge.com/CLFInsiderTrading

About Investor-Edge.com 

At Investor-Edge, we provide our members with a simple and reliable way to leverage our economy of scale. Most investors do not have time to track all publicly traded companies, much less perform an in-depth review and analysis of the complexities contained in each situation. That's where Investor-Edge comes in. We provide a single unified platform for investors' to hear about what matters. Situation alerts, moving events, and upcoming opportunities.

===============

EDITOR'S NOTES:

===============

1. This is not company news. We are an independent source and our views do not reflect the companies mentioned.

2. Information in this release is produced on a best efforts basis by Rohit Tuli, a CFA charterholder. The content is then further fact checked and reviewed by an outsourced research provider. However, we are only human and are prone to make mistakes. If you notice any errors or omissions, please notify us below.

3. This information is submitted as a net-positive to companies mentioned, to increase awareness for mentioned companies to our subscriber base and the investing public.

4. If you wish to have your company covered in more detail by our team, or wish to learn more about our services, please contact us at pubco [at] www.investor-edge.com.

5. For any urgent concerns or inquiries, please contact us at compliance [at] www.investor-edge.com.

6. Are you a public company? Would you like to see similar coverage on your company? Send us a full investors' package to research [at] www.investor-edge.com for consideration.

COMPLIANCE PROCEDURE

Content is researched, written and reviewed on a best-effort basis. This document, article or report is prepared and authored by Investor-Edge, represented by Rohit Tuli, CFA. An outsourced research services provider has only reviewed the information provided by Investor-Edge in this article or report according to the procedures outlined by Investor-Edge. Investor-Edge is not entitled to veto or interfere in the application of such procedures by the outsourced provider to the articles, documents or reports, as the case may be.

NOT FINANCIAL ADVICE

Investor-Edge makes no warranty, expressed or implied, as to the accuracy or completeness or fitness for a purpose (investment or otherwise), of the information provided in this document. This information is not to be construed as personal financial advice. Readers are encouraged to consult their personal financial advisor before making any decisions to buy, sell or hold any securities mentioned herein.

NO WARRANTY OR LIABILITY ASSUMED

Investor-Edge is not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted by Investor-Edge whatsoever for any direct, indirect or consequential loss arising from the use of this document. Investor-Edge expressly disclaims any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Investor-Edge does not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE Investor-Edge