NEW YORK (AP) â¿¿ Shares of Cliffs Natural Resources tumbled 13 percent before Wednesday's opening bell, after the mining company announced a hefty fourth-quarter loss that stemmed from $2 billion in impairment charges.
The company also on Tuesday slashed its quarterly dividend to 15 cents from 62.5 cents and said it plans to sell more stock to pay back debt.
Cliffs posted a loss of $1.62 billion, or $11.36 per share, for the recent quarter. Excluding one-time charges, the company earned an adjusted 62 cents per share, while analysts polled by FactSet expected 51 cents per share.
Revenue fell 4 percent to $1.54 billion, matching Wall Street predictions.The company said prices are likely to stay volatile in 2013, but demand should remain healthy because of high demand in China for raw materials used in making steel. But Citi analyst Brian Yu downgraded Cliffs to "Neutral" from "Buy," calling the company's iron ore pricing predictions "disappointing." Yu, who also lowered his price target by $3 to $33, also pointed to the dividend cut and the company's plans to sell stock. Cliffs said in January that it would take a $1 billion charge because it expected less production and greater costs from Consolidated Thompson Iron Mines, which it bought in 2011. Part of that charge is connected to Cliffs' expansion of the Bloom Lake Mine in Quebec, which has been slower than the company expected. Cliffs also took a charge of $541 million related to two deferred tax assets, $365 million in charges related to the sale of its stake in a Brazilian mining company and wrote down the value of a mine in Canada by $50 million. Shares of Cliffs fell $4.56, or 12.5 percent, to $32.05 in premarket trading. Its shares are up from a 52-week low of $28.05 in early December. They rose as high as $73.63 last May.