Cliffs Natural Resources Inc.CLF has entered into multiple agreements through its subsidiaries with Minnesota Power, a utility division of ALLETE Inc.
The agreements are subject to regulatory approval of the sale of utility assets, including certain non-core operations, transmission assets at United Taconite, some land options at United Taconite and Northshore Mining Company and transportation rights along the Cliffs Erie rail assets. Cliffs has also extended its regulated power arrangements with Minnesota Power for 10 years at its United Taconite and Babbitt facilities.
Cliffs has received $31 million in cash as a part of a long-term purchased power agreement for its Northshore operation with Minnesota Power.
Per Cliffs, the agreement with Minnesota Power will enable it to improve its future competitiveness and the company will achieve significant certainty in the energy management for these operations. It will also continue to improve its cash production costs over the long-term. On the other hand, ALLETE noted that the agreement shall strengthen the partnership between Minnesota Power and Northeastern Minnesota's natural resources industries.
Cliffs' net income (attributable to common shareholders), as reported, for first-quarter 2016 was 62 cents per share, as against net loss of $4.26 per share recorded in the year-ago quarter.
Cliffs' adjusted loss (excluding one-time items including extinguishment of debt and impact of discontinued operations) was 7 cents per share for the first quarter, much lower than the Zacks Consensus Estimate of a loss of 29 cents.
Sales for the quarter came in at $305.5 million, down 32% from $446 million in the prior-year quarter. Sales, however, exceeded the Zacks Consensus Estimate of $300 million.
Cliffs currently carries a Zacks Rank #1 (Strong Buy).
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