Higher expenses help cut Cleveland-Cliffs 1Q profit

Results missed Wall Street's expectations by a wide margin, and shares fell in premarket trading.

After the payment of preferred dividends, net income for the three months ended March 31 fell to $15.8 million, or 32 cents per share, from $31.1 million, or 62 cents per share, in the year-earlier quarter.

Analysts polled by Thomson Financial expected, on average, earnings per share of $1.

Selling, general and administrative expenses rose to $44.6 million from $18.7 million while "management infrastructure and corporate development activities" in Latin America and Asia-Pacific added another $10 million in expenses to the quarter. The company also booked a $7 million litigation charge.

Revenue climbed to a company record $494.4 million from $325.5 million, largely from strong sales by the company's North American Coal and North American Iron Ore segments.

Shares fell $9.33, or 5.6 percent, to $157.89 in premarket trading.