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Cliffs Natural Resources (CLF) -3.7% premarket after announcing adjustments to 2013 operating...

Cliffs Natural Resources (CLF) -3.7% premarket after announcing adjustments to 2013 operating plans for its North American iron ore businesses to align with expected sales volumes. CLF will delay portions of its Bloom Lake Mine Phase II expansion in Quebec, idle two of four production lines at Northshore Mining in Minnesota and temporarily idle production at its Empire Mine in Michigan.
Comments (5)
  • Thomas Azzara
    , contributor
    Comments (458) | Send Message
     
    IO prices today $113.95 (Oct 31, 2012).
    average IO prices in 2013 = $100/120 a ton!

     

    No expansion for CLFs in 2013 means no improvement in EPS.
    19 Nov 2012, 10:10 AM Reply Like
  • kmi
    , contributor
    Comments (3967) | Send Message
     
    Cost cutting may help EPS but won't help revenue. Also defends the 7% dividend. Not a bad place to sit and wait, lots of volatility in CLF, so a rough ride.

     

    Goes ex-div tomorrow I think.
    19 Nov 2012, 10:23 AM Reply Like
  • Thomas Azzara
    , contributor
    Comments (458) | Send Message
     
    $32 a share.... Next stop!
    19 Nov 2012, 06:58 PM Reply Like
  • Thomas Azzara
    , contributor
    Comments (458) | Send Message
     
    TODAY... (Nov 20 2012) ....Credit Suisse analyst (Nathan Littlewood and Yan Truong) lowered their 2013 FY earnings estimates for CLFs to - 78 cents (from +1cent) and lowered 2014 estimates as well to - $2.65 (-1.64).

     

    This AP release yesterday explains what's going down in better detail!
    http://on-msn.com/Wh2bKV

     

    According to the company, their Eastern Canadian iron ore sales volumes will fall to 9 million to 10 million tons for 2013 from its prior expectation of 13 million to 14 million tons.
    The company cited weak demand and plentiful supply as well as weak iron ore prices and higher labor and mining costs.

     

    If you crunch the numbers, 2013 production TONs (and associated revenues) will decline by a hefty sum... 20%.

     

    No way CLFs eps can improve YoY with numbers like this, and lower/weak IO prices to boot.

     

    It's a good bet the 7% dividend will be gone by 2014 as the company will have a FCF problem by then!

     

    Expect downgrades all day long today from the other broker/dealers.
    Goldman Sachs Downgrades Cliffs Natural Resources from Neutral to Sell, Lowers PT from $33 to $25. Standard and Poors kept their SELL rating and lowered their 12 month target to $31.
    20 Nov 2012, 07:35 AM Reply Like
  • RSI Raistlin
    , contributor
    Comments (400) | Send Message
     
    spot IO is barely relevant until contract time. 75% of IO produced is under contract. Good to see them cutting costs until IO prices recover. Keep those mines shuttered for awhile.
    19 Nov 2012, 03:48 PM Reply Like
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