Cliffs Natural Resources (NYSE: CLF): Q1 Earnings Preview 2011

Cliffs Natural Resources (NYSE: CLF), the largest iron ore producer in North America, is scheduled to release its first-quarter earnings after the closing bell on Thursday, April 28, 2011. Analysts, on average, expect the company to report earnings of $2.25 per share on revenue of $1.40 billion. In the year ago period, the company reported earnings of 55 cents per share on revenue of $727.70 million.

Cliffs Natural Resources Inc., a mining and natural resources company, produces iron ore pellets, lump and fines iron ore, and metallurgical coal.

One of Cliffs’ biggest competitive advantage in the iron ore business is its long-standing relationships with some of the largest steel manufacturers in the world. Iron ore pellets produced by Cliffs are almost entirely used as raw material for the production of steel.

The price of iron ore, a key ingredient for steelmaking, has ralied in recent times due to tight Indian supplies and firm demand from top importer China. Cliffs has been following a strategy of geographical diversification while also diversifying its mineral portfolio. The recent acquisition of Consolidated would give Cliffs a foot in the door with Chinese buyers as it looks to boost its Asian business.

In the preceding fourth quarter, the Cleveland, Ohio-based company's net income was $384 million, or $2.82 a share, from $108.2 million, or 82 cents a share in the prior year quarter. Revenue jumped 74% to $1.42 billion from $820.5 million. Analysts, on average, expected the company to report earnings of $2.16 per share on revenue of $1.43 billion

At its last earnings call in January, , Cliffs raised its 2011 outlook for North American Iron Ore, with sales volume expected at about 28 million tons, with revenue of $140 to $145 per ton. Cliffs maintained its forecast for the company’s North American coal business with 2011 sales of about 6.5 million tons

Cliffs Natural Resources has seen growth in revenue from each ton of iron ore sold in North America. The revenue growth can be attributed to increased Chinese demand for iron ore and a continued rise of international sea freight that has pushed iron ore prices upwards. The increase in iron ore prices is also caused by rising global demand for steel sparked by economic growth.

Full Disclosure: None.

Cliffs Natural Resources (NYSE: CLF): Q4 Earnings Preview 2010

Cliffs Natural Resources (NYSE: CLF) the largest iron ore producer in North America, is scheduled to release its fourth-quarter earnings after the closing bell on Wednesday, February 16, 2011. Analysts, on average, expect the company to report earnings of $2.16 per share on revenue of $1.43 billion. In the year ago period, the company reported earnings of 75 cents per share on revenue of $820.50 million.

Cliffs Natural Resources Inc., a mining and natural resources company, produces iron ore pellets, lump and fines iron ore, and metallurgical coal.

In the preceding third quarter, the Cleveland, Ohio-based company's net income was $297.4 million or $2.18 per share, compared to $58.8 million or $0.45 per share in the prior year quarter. Operating income for the third quarter jumped to $389.2 million from $80.5 million in the year-ago quarter. Revenue more than doubled to $1.3 billion from $666.4 million in the same quarter last year. Analysts, on average, expected the company to post earnings of $2.59 per share on revenue of $1.45 billion.

At its last earnings call in October, Cliffs said it expected steady demand for the rest of 2010 and into 2011 with steel utilization rates remaining stable.  In 2011, Cliffs expects to produce and sell about 27 million tons from its North American Iron Ore business. In 2011, Cliffs expects to produce and sell about 6.5 million tons from its North American Coal business, including 5.5 million tons of metallurgical coal and 1.0 million tons of thermal coal.  In 2011, Cliffs expects to produce and sell about 9.0 million tons from its Asia Pacific Iron Ore business.

Cliffs Natural Resources has seen growth in revenue from each ton of iron ore sold in North America. The revenue growth can be attributed to increased Chinese demand for iron ore and a continued rise of international sea freight that has pushed iron ore prices upwards. The increase in iron ore prices is also caused by rising global demand for steel sparked by economic growth.

In January, the company announced a comprehensive global reorganization that will realign global management responsibilities for its commercial sales and marketing, operating and corporate support.

Last month, the company agreed to acquire all of Consolidated Thompson Iron Mines Ltd.'s common shares for about C$4.9 billion, including net debt, in an all-cash transaction. With this acquisition, Cliffs is expected to be one of the largest mining and natural resources companies in North America, with significant exposure to Asia. The Consolidated Thompson transaction is expected to close early second quarter 2010. Consolidated Thompson currently operates in the iron ore-rich area spanning northeastern Quebec, western Newfoundland and Labrador. The company manages and operates Bloom Lake, an open-pit iron ore mine, and two adjacent development properties, Lamelee and Peppler Lake. The transaction is expected to be modestly accretive to Cliffs' earnings and cash flow in 2011 and 2012. Cliffs estimates that the proposed transaction could generate annual pre-tax operating synergies of about US$75 million.

The acquisition of Consolidated Thompson is in-line with Cliffs strategy to diversify its geographical presence. Almost all its sale of iron ore in China is currently through its Asia Pacific Iron Ore Division, which has a limited supply capacity of 9 million metric tonnes of iron ore. The added capacity would allow Cliffs to garner a bigger share of the seaborne iron ore trade with Asia.

Full Disclosure: None.