I still call this company Cleveland Cliffs, but whatever the name investors still seem 'surprised' by earnings despite a rally in every commodity (save natural gas) on Earth by the results reported last evening. The stock is up 11% in premarket.
- Cliffs Natural Resources Inc reported a better-than-expected surge in quarterly profit as demand and prices for its iron ore and steel-making coal soared, and its shares rose nearly 10 percent.
- Chief Executive Joseph Carrabba said the growth stemmed from the mining company's move to increase exposure to global pricing for its output, which was a big part of the strategy behind its pending $4 billion acquisition of Canada's Consolidated Thompson Iron Mines.
- Cliffs said its fourth-quarter net earnings were $384 million, or $2.82 per share, compared with $108 million, or 82 cents per share, in the quarter a year earlier. That fourth-quarter EPS was well above analysts' estimate of $2.16, according to Thomson Reuters I/B/E/S. Revenue rose 73 percent to $1.42 billion from $821 million, the Cleveland-based company said on Wednesday.
- The price of iron ore, a key ingredient for steelmaking, soared over 40 percent in 2010, due to tight Indian supplies and firm demand from top importer China. The acquisition of Consolidated could give Cliffs a foot in the door with Chinese buyers as it looks to boost its Asian business. Prices of coking coal, another steelmaking ingredient, have also surged after massive flooding disrupted shipments and production in Australia.
- The Cliffs share price had already more than doubled since hitting a 52-week low of $44.38 last July.