Cliffs reports higher revenuesCliffs Natural Resources Inc. on Thursday reported third-quarter results showing consolidated revenues of
By: John Myers, Duluth News Tribune
Cliffs Natural Resources Inc. on Thursday reported third-quarter results showing consolidated revenues of $1.5 billion, up from 2012, the company said, thanks to a 17 percent increase in global seaborne iron ore prices.
The price of open market iron ore averaged $133 per ton over the quarter, Cliffs noted, up from this time last year, while the company reported their “cost of goods sold” was down 11 percent from the third quarter last year.
The lower cost of goods sold and higher revenues resulted in a 76 percent increase in consolidated sales margin to $349 million, up from $198 million in last year’s comparable quarter.
Operating income for the third quarter of 2013 increased 194 percent to $224 million. Cliffs reported third-quarter 2013 net income attributable to Cliffs’ common shareholders of $104 million, or $0.66 per diluted share. That’s up from $85 million, or $0.59 per diluted share, in the third quarter of 2012.
The company also said Thursday that it expects U.S. taconite iron ore sales in 2014 to be between 23 million and 24 million tons, which would be up significantly from the 21 million tons expected to be sold this year.
“This is primarily attributable to a new supply agreement with one of our North American steelmaking customers,’’ Cliffs said, probably referring to a deal announced in August with AK Steel to provide taconite to the steelmaker through 2023.
The company did not say which of its U.S. facilities would supply that increase.
“During the quarter, we cut costs across the board, improved year-over-year sales margin, and lowered our full-year capital expenditures outlook,’’ James Kirsch, Cliffs’ chairman of the board, said in the company’s statement.
Cleveland-based Cliffs owns and operates Northshore Mining in Silver Bay and Babbitt as well as United Taconite in Eveleth and Forbes, and also is part-owner and manager of Hibbing Taconite. The company also owns and operates the Empire/Tilden taconite operations in Michigan’s Upper Peninsula and multiple iron ore mines in Canada and Australia, as well as coal mines and other ventures.