What to Look for in Cliffs Natural Resources’s 1Q17 Results



CLF’s underperformance in 1Q17

Cliffs Natural Resources (CLF) underperformed the other global iron ore miners in 1Q17. Its stock price fell 2.4% in 1Q17 after rising an impressive 404% in 2016. Cliffs Natural Resources’s results for 4Q16 were hugely positive and beat market expectations by a wide margin.

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Doubts over Trump’s policies

Although Cliffs Natural Resources’s fundamentals have been strong, the question over President Donald Trump’s infrastructure plans led its stock to fall. Other US steelmakers (SLX) such as U.S. Steel (X), AK Steel (AKS), and Nucor (NUE) also saw falling stock prices.

The American Health Care Act, also known as “Trumpcare,” was pulled back before coming up for a vote in the U.S. House of Representatives. Trumpcare’s failure came as a rude shock to these steel stocks. Investors should note that these are the same stocks that were on a high after Trump’s election as US president.

Trump’s stance on protectionism, as well as his infrastructure spending plans, led material stocks to soar. If these plans are relegated to the back burner, these stocks could be negatively impacted instead.

Series overview

In this series, we’ll see what investors could expect from Cliffs Natural Resources’s 1Q17 results, which are scheduled to be released on April 27, 2017, before the US market opens. We’ll look at the expectations for volumes and realized prices for the US and Asia-Pacific divisions.

We’ll also discuss the earnings estimates for Cliffs Natural Resources. It’s important to note that analyst estimates usually lag behind price movements—upgrades come after stocks have risen, and downgrades typically come after stock prices fall.

Changes in analyst estimates are key drivers of short-term price movements. Investors should keep track of changes in analyst estimates because they provide insights into what the markets expect from a company.


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