We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cliffs Natural (CLF) Down 23.1% Since Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Cliffs Natural Resources Inc. (CLF - Free Report) . Shares have lost about 23.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cliffs’ Q4 Earnings, Revenues Beat Estimates
Cliffs reported net earnings (attributable to Cliffs shareholders) of $79.1 million or $0.34 per share in the fourth quarter of 2016, versus net loss (attributable to Cliffs shareholders) of $60.3 million or $0.39 per share logged in the year-ago quarter.
Adjusted earnings (excluding one-time items) for the reported quarter came in at $0.41 per share, beating the Zacks Consensus Estimate of earnings of $0.25.
Sales for the quarter came in at $754 million, surging 58.4% from $476 million in the prior-year quarter. Sales also beat the Zacks Consensus Estimate of $688.5 million.
Full-Year 2016
Cliffs recorded consolidated sales of $2.1 billion in 2016, up 5% from 2015. Net income attributable to the company’s shareholders in the year came in at $174 million or $0.87 per share, against a net loss of $788 million or $5.13 per share recorded in 2015.
Segment Performance
U.S. Iron Ore: U.S. Iron Ore pellet sales volume was 6.9 million long tons in the fourth quarter, compared with 4.5 million tons in the year-ago quarter. The rise was mainly due to improved steel market conditions increasing demand for pellets along with new customer arrangements in 2016.
Revenues per ton dipped 0.5% year over year to $73.86. Cash production cost per ton fell 8% year over year to $52.80 in the reported quarter as the quarter did not face any idle costs and supplies inventories write-down recorded in the previous year quarter. Moreover, asset retirement obligation adjustment also favorably impacted the segment.
Asia Pacific Iron Ore: Sales volumes in the segment inched up 0.7% year over year to almost 2.94 million metric tons. The increase was attributed to the size of the shipment vessels.
Revenues per ton were $57.30, up around 69.9% from $33.73 in the prior-year quarter. Cash production cost per ton was $36.40, up around 8% from the year-ago quarter. The increase was due to higher royalties and currency headwinds, along with higher mining and haulage costs.
Financial Position
Cliffs had $323.4 million of cash and cash equivalents as of Dec 31, 2016, compared with $285.2 million as of Dec 31, 2015. Long-term debt was at $2,175.1 million as of Dec 31, 2016, compared with $2,699.4 million as of Dec 31, 2015.
Capital expenditure was $23 million for the fourth quarter, in line with the fourth quarter of 2015. Depreciation, depletion and amortization were $27 million in the quarter.
Outlook
For 2017, Cliffs expects to generate net income of $510 million. The company projects its full-year selling, general and administrative (SG&A) expenses to be around $100 million, an $18 million decrease from 2016, of which $25 million is expected to be non-cash expenses.
Depreciation, depletion and amortization for 2017 are expected to be about $100 million. The company's interest expense for 2017 is anticipated to be roughly $175 million, compared to the $201 million recorded in 2016.
Cliffs expects its 2017 capital expenditures to be $105 million, including $40 million associated with the conclusion of the Mustang Project at the United Taconite mine.
U.S. Iron Ore Outlook
For 2017, Cliffs expects sales and production volume of 19 million long tons for the segment. Further, the company expects iron-ore cash cost of goods sold and operating expense to be in the range of $55-$60 per long ton.
Asia Pacific Iron Ore Outlook
For 2017, Cliffs projects sales and production volume of roughly 11.5 million tons for the Asia Pacific Iron Ore operation. Moreover, the company expects iron-ore cash cost of goods sold and operating expense to be in the range of $34-$39 per metric ton.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 18.1% due to these changes.
At this time, Cliffs Natural's stock has a great score of 'A' on both growth and momentum front. The stock was also allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stocks has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value, momentum and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cliffs Natural (CLF) Down 23.1% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Cliffs Natural Resources Inc. (CLF - Free Report) . Shares have lost about 23.1% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cliffs’ Q4 Earnings, Revenues Beat Estimates
Cliffs reported net earnings (attributable to Cliffs shareholders) of $79.1 million or $0.34 per share in the fourth quarter of 2016, versus net loss (attributable to Cliffs shareholders) of $60.3 million or $0.39 per share logged in the year-ago quarter.
Adjusted earnings (excluding one-time items) for the reported quarter came in at $0.41 per share, beating the Zacks Consensus Estimate of earnings of $0.25.
Sales for the quarter came in at $754 million, surging 58.4% from $476 million in the prior-year quarter. Sales also beat the Zacks Consensus Estimate of $688.5 million.
Full-Year 2016
Cliffs recorded consolidated sales of $2.1 billion in 2016, up 5% from 2015. Net income attributable to the company’s shareholders in the year came in at $174 million or $0.87 per share, against a net loss of $788 million or $5.13 per share recorded in 2015.
Segment Performance
U.S. Iron Ore: U.S. Iron Ore pellet sales volume was 6.9 million long tons in the fourth quarter, compared with 4.5 million tons in the year-ago quarter. The rise was mainly due to improved steel market conditions increasing demand for pellets along with new customer arrangements in 2016.
Revenues per ton dipped 0.5% year over year to $73.86. Cash production cost per ton fell 8% year over year to $52.80 in the reported quarter as the quarter did not face any idle costs and supplies inventories write-down recorded in the previous year quarter. Moreover, asset retirement obligation adjustment also favorably impacted the segment.
Asia Pacific Iron Ore: Sales volumes in the segment inched up 0.7% year over year to almost 2.94 million metric tons. The increase was attributed to the size of the shipment vessels.
Revenues per ton were $57.30, up around 69.9% from $33.73 in the prior-year quarter. Cash production cost per ton was $36.40, up around 8% from the year-ago quarter. The increase was due to higher royalties and currency headwinds, along with higher mining and haulage costs.
Financial Position
Cliffs had $323.4 million of cash and cash equivalents as of Dec 31, 2016, compared with $285.2 million as of Dec 31, 2015. Long-term debt was at $2,175.1 million as of Dec 31, 2016, compared with $2,699.4 million as of Dec 31, 2015.
Capital expenditure was $23 million for the fourth quarter, in line with the fourth quarter of 2015. Depreciation, depletion and amortization were $27 million in the quarter.
Outlook
For 2017, Cliffs expects to generate net income of $510 million. The company projects its full-year selling, general and administrative (SG&A) expenses to be around $100 million, an $18 million decrease from 2016, of which $25 million is expected to be non-cash expenses.
Depreciation, depletion and amortization for 2017 are expected to be about $100 million. The company's interest expense for 2017 is anticipated to be roughly $175 million, compared to the $201 million recorded in 2016.
Cliffs expects its 2017 capital expenditures to be $105 million, including $40 million associated with the conclusion of the Mustang Project at the United Taconite mine.
U.S. Iron Ore Outlook
For 2017, Cliffs expects sales and production volume of 19 million long tons for the segment. Further, the company expects iron-ore cash cost of goods sold and operating expense to be in the range of $55-$60 per long ton.
Asia Pacific Iron Ore Outlook
For 2017, Cliffs projects sales and production volume of roughly 11.5 million tons for the Asia Pacific Iron Ore operation. Moreover, the company expects iron-ore cash cost of goods sold and operating expense to be in the range of $34-$39 per metric ton.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. In the past month, the consensus estimate has shifted lower by 18.1% due to these changes.
Cliffs Natural Resources Inc. Price and Consensus
Cliffs Natural Resources Inc. Price and Consensus | Cliffs Natural Resources Inc. Quote
VGM Scores
At this time, Cliffs Natural's stock has a great score of 'A' on both growth and momentum front. The stock was also allocated a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.
Overall, the stocks has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is equally suitable for value, momentum and growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.