Cliffs Natural Resources (CLF) will release its 1Q15 earnings results after the US market closes on April 28. A conference call with securities analysts and institutional investors will occur at 10:00 AM ET on April 29 to discuss the results. The dial-in for the conference call is 877-201-0168 or 647-788-4901, and the conference ID is 20838952.
In this series, we’ll provide a preview of what to expect from the earnings. The preview will allow you to compare the company’s actual performance with the expectations.
Why are the results important?
Cliffs’ results on April 28 are important for two reasons. One is to look at the operating performance of the company since the price of iron ore touched fresh lows in the first quarter. Prices touched a decade low of $47.08 in March. The second is that there are many decisions of strategic importance that might be addressed either in the results release or during the earnings conference call.
The details surrounding the management’s strategy regarding further deleveraging of the balance sheet, including possible sales of further coal assets, will be important. Management could also address the Bloom Lake bankruptcy process and related asset sales. Investors will also be interested in any updates around lowering production costs and increasing efficiency further in the US Iron Ore segment.
The first quarter of 2015 hasn’t been good for iron ore or iron ore equities. Most of the iron ore equities lost significant value during the quarter. They were impacted by various factors, the most important being the supply glut by major iron ore producers, including BHP Billiton (BHP), Rio Tinto (RIO), and Vale (VALE), as well as weaker-than-expected demand growth from the world’s largest iron ore consumer, China.
Cliffs lost 31.6% of its value in 1Q15, Vale lost 28.8%, RIO lost 4.3%, while BHP gained 1.9%. Cliffs forms 3.8% of the SPDR S&P Metals and Mining ETF (XME).