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.
CLEVELAND (AP) â¿¿ Cliffs Natural Resources Inc. said Tuesday that it took a large loss in the fourth quarter after logging $2 billion in impairment charges. The company said in January that it would take a $1 billion charge because it expects less production and greater costs from Consolidated Thompson Iron Mines, which it bought in 2011. It also said seaborne iron ore prices dropped during the quarter. On Tuesday Cliffs slashed its quarterly dividend and said it plans to sell more stock to pay back debt. Cliffs shares fell $3.49, or 9.5 percent, to $33.12 in aftermarket trading. Cliffs lost $1.62 billion, or $11.36 per share, in the fourth quarter. A year ago it reported net income of $185.4 million, or $1.30 per share. The company said it earned 62 cents per share in the latest period, excluding one-time charges. Revenue fell 4 percent to $1.54 billion. Analysts expected 51 cents per share and $1.54 billion in revenue, according to FactSet. Part of the $1 billion 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. The company pared its quarterly dividend to 15 cents from 62.5 cents, a 76 percent cut. Cliffs also said it will sell 20 million depositary shares and 9 million shares of common stock to repay borrowing under its term loan facility. The underwriters of the offering will have options to buy another 3 million depositary shares and 1.4 million common shares to cover overallotments. For all of 2012 Cliffs lost $899.4 million, or $6.32 per share. The company posted a profit of $1.62 billion, or $11.48 per share, in 2011. Revenue fell 11 percent, to $5.87 billion.