Cliffs Natural Resources Inc.
) announced that it has entered into a new long term agreement
with steel producer
AK Steel Holding Corporation
) to supply iron ore pellets. The agreement is an extension of
the previous contract with AK Steel and the tenure of the new
agreement is from 2014 through 2023.
The new agreement includes minimum and maximum volume iron ore
pellet purchase from Cliffs. As per Cliffs, the supply agreement
is tied to a moving price index, based on changing iron ore
prices and producer price indexes. As per the previous agreement,
Cliffs will continue to supply AK Steel with iron ore pellets for
the remainder of this year and 2014.
Cliffs reported its second-quarter 2013 results on Jul 25. The
company's net earnings of 82 cents per share dropped roughly 55%
from $1.81 a year ago. Net income (attributable to common
shareholders) declined 48% year over year to $133 million, hit by
a decline in global iron ore prices and higher costs.
The results include $68 million asset impairment charges
related to the write down of Cliffs' Amapa investment as well as
income tax expense of $9 million. Barring one-time items,
earnings of $1.13 per share topped the Zacks Consensus Estimate
of 61 cents.
Sales for the quarter came in at $1,488.5 million, down
roughly 6% from $1,579.4 million in the prior-year quarter.
However, it exceeded the Zacks Consensus Estimate of $1,436
million. An 11% decline in global iron ore pricing led to reduced
sales in the quarter.
Cliffs currently retains a Zacks Rank #3 (Hold).
AK STEEL HLDG (AKS): Free Stock Analysis
AVALON RARE MTL (AVL): Free Stock Analysis
CLIFFS NATURAL (CLF): Free Stock Analysis
KUMBA IRON ORE (KIROY): Get Free Report
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Other companies in the mining industry with favorable Zacks Rank
Kumba Iron Ore Ltd.
Avalon Rare Metals Inc.
). While Kumba Iron Ore retain a Zacks Rank #1 (Strong Buy),
Avalon Rare Metals holds a Zacks Rank #2 (Buy).