Cliffs Natural Profit Fell Sharply but Beat Estimates

By Austen Hufford 

Cliffs Natural Resources Inc. posted revenue and profit declines, but beat analyst expectations as the iron-ore miner continues to face low prices.

Cliffs has been hurt by weak demand from steelmakers, which have been grappling with low prices amid a glut of supply and a high level of less expensive imports.

Cliffs, one of the country's biggest mining companies, has continued to streamline its operations with the hope that iron-ore prices will recover in time to stave off bankruptcy. Selling, general and administrative expenses fell 27% to $22.5 million.

Net debt decreased to $2.3 billion from $2.6 billion last year.

Chairman and Chief Executive Lourenco Goncalves said Thursday that Cliffs signed deals in the quarter that are "essential" to future growth, including a multiyear supply agreement with steelmaker ArcelorMittal, a low-cost power agreement in Minnesota and a supply deal with new customer U.S. Steel Canada Inc.

For the quarter, Cliffs Natural reported a profit of $12.8 million, or 7 cents a share, compared with year-earlier profit of $60.2 million, or 39 cents a share. Revenue fell 0.4% to $496.2 million.

Analysts polled by Thomson Reuters expected per-share profit of 2 cents and revenue of $464.8 million.

The company reaffirmed its 2016 capital spending guidance of $75 million.

Shares, up 48% in the past three months, rose 1.9% to $8 in morning trading.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

July 28, 2016 11:39 ET (15:39 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.