What happened?

Shares of Cleveland-Cliffs Inc. (NYSE:CLF), the largest and oldest iron-ore mining company in the U.S., were up 10% as of 3:14 p.m. EDT Friday after the company announced better than expected second-quarter results.

So what

The company reported consolidated revenues of $714 million, significantly better than the prior year's $471 million, and higher than analysts' estimates of $692.2 million, per analysts surveyed by investment research firm Zacks. Income from continuing operations jumped to $229 million, or $0.76 per diluted share, which was again a large improvement from the prior year's $84 million, or $0.28 per share, and well ahead of analysts' estimates calling for $0.56 per share, per Zacks. Another bright spot was a 16% increase in its U.S. iron-ore realized revenue rate.

Trucks mining iron ore

Image source: Getty Images.

President and CEO Lourenco Goncalves said in a press release: "Our second quarter is a definitive statement about the new Cliffs and our earnings power. After almost four years of consistent execution of a well-designed and thoroughly implemented strategy, our company has become a very powerful cash-generating enterprise."

Now what

It's understandable that investors pushed the stock higher today. The second-quarter surge in earnings reflects an end, or near-end, to its multiyear transformation to get back to its roots as a supplier of high-grade iron units. Now that the company is focused on its roots, it expects to generate cash this year at a level it hasn't seen in years, and for that strong momentum to continue into 2019. Business is looking good, and today's 10% jump means investors are buying into its future potential.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.