Cliffs Natural Resources beats by $0.09, beats on revs (7.73)
- Reports Q2 (Jun) earnings of $0.26 per share, $0.09 better than the Capital IQ Consensus of $0.17; revenues rose 14.7% year/year to $569.3 mln vs the $485.93 mln Capital IQ Consensus.
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Outlook
- Based on the assumption that iron ore and steel prices will average for the remainder of 2017 their respective year-to-date averages, Cliffs would generate approximately $310 million of net income and $650 million of adjusted EBITDA1 for the full-year 2017.
- U.S. Iron Ore Outlook: Cliffs full-year sales and production volumes expectation is unchanged at approximately 19 million long tons.
- Asia Pacific Iron Ore Outlook: Cliffs' full-year 2017 Asia Pacific Iron Ore expected production volume is unchanged at approximately 11.5 million metric tons. Due to market conditions, sales volume outlook has been reduced by 500,000 metric tons to 11 million metric tons. The product mix is expected to contain 52 percent lump ore and 48 percent fines
- Cliffs' full-year 2017 capital expenditures budget was increased by $10 million to $115 million, with the increase attributable to early spending related to the HBI production plant.
- Lourenco Goncalves, Cliffs' Chairman, President and Chief Executive Officer, said, "Our second quarter results clearly demonstrate the true power of our U.S. Iron Ore business, in which we have unrivaled operational, commercial, logistical, and quality advantages. Even as iron ore prices in Asia dropped substantially during the second quarter, these unique advantages enabled us to achieve EBITDA margins that are at the peak of the industry in the United States." Mr. Goncalves added, "Going forward, we will further expand on our unquestionable strength as a supplier of customized iron units in the Great Lakes, with the development of our HBI production plant in Toledo, Ohio. The new plant will enable Cliffs to supply high-quality, customized HBI as feedstock to select Electric Arc Furnace steelmakers. As EAF's become Cliffs' clients, we expect the earnings power of U.S. Iron Ore will carry over to this new busines