Cliffs Natural Resources Inc.
) announced that its board of directors has authorized it to
repurchase shares worth up to $200 million. The buyback
authorization is valid till Dec 31, 2015. Cliffs will work with its
bank group to make sure that the buyback program is successfully
implemented within the stipulated time.
Cliffs' shares rose as much as 3.5% during the trading hours
following the news release. The stock is down roughly 37% so far
The board has also authorized Cliffs to employ all measures
required to eliminate the limitations and restrictions in the
company's current debt agreements which prevent Cliffs from
executing the buyback program.
Cliffs also revealed that it has started implementing its new
strategy centered on the U.S. iron ore business. The company stated
that, at this juncture, the best use of its capital is to invest in
its own business, people and assets by buying back its common
stock. The company's newly constituted board is in sync with this
Cliffs also announced that its former CEO Gary Halverson has
resigned from his position as a board member.
Cliffs released its second-quarter 2014 results last month. The
company posted net loss of $2 million, or a penny per share
compared with a net income of $133 million or 82 cents per share in
the year-ago quarter, hurt by a double-digit decline in sales. The
loss was narrower than the Zacks Consensus Estimate of a loss of 8
cents per share.
Sales for the quarter came in at $1,100.8 million, down 26% from
$1,488.5 million in the prior-year quarter. It also missed the
Zacks Consensus Estimate of $1,150 million. The decline was due to
significantly lower market pricing for iron ore and metallurgical
coal, and a 24% reduction in the company's iron ore sales
Cliffs currently carries a Zacks Rank #3 (Hold).
Other mining companies with favorable Zacks Rank include Silver
Standard Resources Inc. (
) Kazakhmys PLC (
), Orbite Aluminae Inc (
). While Silver Standard sports a Zacks Rank #1 (Strong Buy), both
Kazakhmys and Orbite Aluminae hold a Zacks Rank #2 (Buy).
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