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Cliffs Natural Resources Crushes Earnings Estimates

By Seth Jayson - Updated Apr 10, 2017 at 1:42PM

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Just the facts, Fool.

Cliffs Natural Resources (NYSE: CLF) reported earnings on April 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Cliffs Natural Resources missed estimates on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted. Non-GAAP earnings per share contracted significantly. GAAP earnings per share shrank significantly.

Margins shrank across the board.

Revenue details
Cliffs Natural Resources tallied revenue of $1.14 billion. The 12 analysts polled by S&P Capital IQ hoped for revenue of $1.19 billion on the same basis. GAAP reported sales were 9.8% lower than the prior-year quarter's $1.26 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.60. The 19 earnings estimates compiled by S&P Capital IQ forecast $0.34 per share. Non-GAAP EPS of $0.60 for Q1 were 29% lower than the prior-year quarter's $0.85 per share. GAAP EPS of $0.66 for Q1 were 75% lower than the prior-year quarter's $2.63 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 20.9%, 310 basis points worse than the prior-year quarter. Operating margin was 14.8%, 320 basis points worse than the prior-year quarter. Net margin was 9.4%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.39 billion. On the bottom line, the average EPS estimate is $0.99.

Next year's average estimate for revenue is $5.46 billion. The average EPS estimate is $2.48.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,596 members out of 1,665 rating the stock outperform, and 69 members rating it underperform. Among 291 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 276 give Cliffs Natural Resources a green thumbs-up, and 15 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cliffs Natural Resources is hold, with an average price target of $28.22.

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Stocks Mentioned

Cliffs Natural Resources Inc. Stock Quote
Cliffs Natural Resources Inc.
CLF
$22.62 (-1.70%) $0.39

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