The company that operates Hibbing Taconite, United Taconite and Northshore Mining in Minnesota posted stronger-than-expected first-quarter sales, as iron ore prices finally began to recover after three years of global weakness.
First-quarter 2017 sales jumped 51 percent to $462 million also because of a swell in new business. Revenue results beat analysts' expectations by $50 million.
While sales were robust, Ohio-based Cliffs Natural Resources reported a $30 million loss for the first quarter due to restructuring that cut debt by $550 million during the quarter.
The quarter's profit loss compares to year-ago, first-quarter net income of $117 million. Those gains included a significant $179 million benefit from the extinguishment of various debts. The company now owes $1.6 billion, down from $2.5 billion a year ago.
Excluding one-time items and taxes, Cliffs' adjusted first-quarter profits grew 156 percent to $92 million.
"During the first quarter, we put our finishing touches on what has been a remarkable operational, commercial and financial transformation of this company," said President and CEO Lourenco Goncalves in a statement. "Over the last two-and-half years, Cliffs has transformed itself into a lean and focused company, with a strong balance sheet and a lot less to pay in interest expense. This is particularly evident in our strong first-quarter results, which exceeded our expectations in revenues, [earnings before taxes and depreciation] and earnings per share."
In recent years, Cliffs sold off its coal mines and refocused energies on iron ore mines and processing plants in the United States and Asia. It built a new $65 million iron ore pelletizing plant in Forbes, Minn., next to its United Taconite facility. The new plant will service longtime customer ArcelorMittal and replace product supplies disrupted when Cliffs shut its Empire Mine in Michigan last year.
Cliffs recently attempted to buy the old Essar Steel Minnesota operation in Nashwauk, Minn., out of bankruptcy court. But its bid — $75 million for the $1.9 billion project — was ultimately too low to be a serious contender.
