Upcoming 3Q15 results
Cliffs Natural Resources (CLF) will release its 3Q15 results before the US market opens on October 29, 2015. A conference call with securities analysts and institutional investors will occur at 10:00 AM ET on October 29 to discuss the results. The link to the live broadcast of the conference call is http://www.cliffsnaturalresources.com.
In this series, we’ll provide a preview of what to expect from the earnings and management call. This preview will allow you to compare the company’s actual performance with the expectations.
Why should you watch the results?
Cliffs Natural Resources’ results on October 29 are important for investors to watch, since the company will highlight its relative sensitivity to the seaborne iron ore market through US steel imports.
Cliffs mentioned in its 2Q15 results call that it expects US steel imports to moderate in 2H15 as imports respond to anti-dumping lawsuits. Anything confirming that view could be a potential positive for the stock.
There are also many strategically important decisions the company might address in the results release or during the earnings conference call. The company may provide details surrounding management’s strategy to further deleverage the balance sheet, including possible sales of further coal assets. Analysts are also anticipating a further update on the company’s venture into a direct reduced iron business and negotiations regarding the ArcelorMittal (MT) contract, which comes up for renewal in 2016.
About Cliffs Natural Resources
Cliffs Natural Resources is mainly an iron ore producer. A small percentage of its revenue comes from metallurgical coal sales. Cliffs accounts for close to 46% of North America’s iron ore pellet supply.
Cliffs has operations in the United States, Eastern Canada, and Australia. In the beginning of 2015, it put its Eastern Canadian Iron Ore assets into bankruptcy. Cliffs has a small direct exposure to the volatile seaborne iron ore market where mining giants such as BHP Billiton (BHP), Rio Tinto (RIO), and Vale S.A. (VALE) operate.
The rest of the company’s earnings are tied to legacy contracts in the United States with integrated US steel players, including United States Steel (X), AK Steel (AKS), and ArcelorMittal (MT). The SPDR S&P Metals and Mining ETF (XME) is another way for investors to play the metals and mining space. Cliffs Natural Resources, United States Steel, and AK Steel account for 3.4%, 3.8%, and 4.5%, respectively, of XME’s holdings.