EmailStory Stocks®
Archive
Last Update: 13-Feb-13 07:49 ET
Cliff Natural Resources shares plunge 13% despite better than expected earnings
Cliffs Natural Resources (CLF) reported fourth quarter earnings of $0.62 per share, excluding non-recurring items, $0.07 better than the Capital IQ consensus of $0.55, while revenues fell 4.2% year/year to $1.54 billion versus the $1.53 bln consensus. Company Reports Full-Year 2012 Revenues of $5.9 Billion, Down 11% from 2011 Due to Lower Seaborne Pricing Global Iron Ore Sales Volume Increases 5% to 42 Million Tons Cliffs' Board of Directors Approves a 76% Reduction to the Quarterly Cash Dividend to $0.15 Per Common Share Lower Expected Full-Year 2013 SG&A and Exploration Expenses 2013 Outlook "In 2013, Cliffs anticipates the end markets for its products to remain healthy, primarily driven by China's continued demand for steelmaking raw materials. Cliffs expects its global iron ore sales to be relatively flat year over year at approximately 40 million tons. While the recent iron ore spot price reached $159 per ton, a new 12-month high, the Company expects pricing for the commodities it sells to remain volatile. Due to this expected volatility and for the purpose of providing a full-year outlook, Cliffs will utilize the year-to-date average 62% Fe seaborne iron ore spot price as of Jan. 31, 2013, which was $150 per ton (C.F.R. China), as a base price assumption for providing its full-year 2013 revenue-per-ton sensitivities for the Company's iron ore business segments."
The company also announced that it is offering to sell 9,000,000 of its common shares, par value $0.125 per share and 20,000,000 of its depositary shares, each representing a 1/40th interest in a share of its new mandatory convertible preferred stock, Class A, $1,000 liquidation preference per Mandatory Convertible Preferred Share in separate registered public offerings. The Company intends to use the net proceeds from the Common Shares Offering and the Mandatory Convertible Preferred Shares Offering to repay borrowings outstanding under its term loan facility. Any remaining net proceeds will be used for general corporate purposes. J.P. Morgan and BofA Merrill Lynch are serving as joint book-running managers for the Common Shares Offering and the Mandatory Convertible Preferred Shares Offering.
The company also announced that it is offering to sell 9,000,000 of its common shares, par value $0.125 per share and 20,000,000 of its depositary shares, each representing a 1/40th interest in a share of its new mandatory convertible preferred stock, Class A, $1,000 liquidation preference per Mandatory Convertible Preferred Share in separate registered public offerings. The Company intends to use the net proceeds from the Common Shares Offering and the Mandatory Convertible Preferred Shares Offering to repay borrowings outstanding under its term loan facility. Any remaining net proceeds will be used for general corporate purposes. J.P. Morgan and BofA Merrill Lynch are serving as joint book-running managers for the Common Shares Offering and the Mandatory Convertible Preferred Shares Offering.
