Expect soft Q1 and beyond from Cliffs Natural, Wells Fargo says

|By:, SA News Editor

It's easy to blame the winter weather for any earnings disappointments this quarter, but don’t buy it when Cliffs Natural Resources (CLF) uses the excuse when it reports April 24, Wells Fargo analysts say.

The firm expects CLF to report soft Q1 results and guidance due to declining iron ore prices and, yes, the weather; but Wells is bearish, as the long-term bias to pricing remains negative.

Investors likely will focus on restructuring efforts, particularly progress in either selling or finding a partner for high cost Canadian operations, not an easy feat in a downturn; CLF also is evaluating an MLP structure for its U.S. operations, but the firm does not view an MLP conversion as a de-leveraging event.