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Cliffs Natural Amends Credit Facility for Share Buyback - Analyst Blog

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Cliffs Natural Resources Inc. ( CLF ) has amended its revolving credit facility through a successful negotiation with the banking group party, which enables it to repurchase its outstanding common shares in the open market or in private negotiated transactions up to a maximum of $200 million. The authorization is valid till Dec 31, 2015.

Cliffs is not required to make any purchases and the buyback program may be suspended or discontinued at any time. The amended terms with the banking partners reduce the size of the current unsecured revolving credit facility to $1.25 billion. The amended facility provides adequate financial flexibility to the company to execute its strategy. Cliffs gets the flexibility to invest in its own business and return capital to its shareholders.

Cliffs released its second-quarter 2014 results in Jul 2014. 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, affected 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 volumes.

Cliffs currently carries a Zacks Rank #3 (Hold).

Other mining companies with favorable Zacks Rank include Fortescue Metals Group Limited ( FSUGY ), Kazakhmys PLC ( KZMYY ) and Orbite Aluminae Inc ( EORBF ). While Fortescue Metals Group sports a Zacks Rank #1 (Strong Buy), both Kazakhmys and Orbite Aluminae hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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