CLEVELAND (AP) â¿¿ Cliffs Natural Resources Inc. said Wednesday its first-quarter net income dropped more than 70 percent as the mining company continued to reel from declining prices of iron ore.
Despite the drop in profit the company's results beat Wall Street's expectations, sending its shares 4 percent higher in afterhours trading.
Cliffs reported net income of $97.1 million, or 66 cents per share, down from $375.8 million, or $2.63 per share, in the first quarter of 2012. This year's quarter included an income tax benefit of $6 million. Last year's results included a tax benefit of $255 million.
Accounting for that and other one-time adjustments the company would have earned $89 million, or 60 cents per share, compared with $121 million, or 85 cents a share.Revenue fell 6 percent to $1.14 billion. Analysts polled by FactSet, on average expected earnings of 32 cents per share on revenue of $1.16 billion. Cliffs said the lower revenues were driven by a 10 percent decrease in global iron ore sales volumes, which contributed to a 2 percent decrease in cost of goods sold. The Cleveland-based company sells iron ore in the U.S. and Asia. Iron ore is used in blast furnaces as part of the steel-manufacturing process. Iron-ore prices have fallen sharply as the global steel industry has struggled with tepid demand and plentiful supplies. Cliffs' chairman, president and CEO, Joseph Carrabba, said, "We are headed in the right direction in 2013. During the first quarter, we took deliberate measures to reduce our balance sheet leverage and improve our cash position." Company shares rose 79 cents to $19.01 in afterhours trading following the release of the earnings report.