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Why Shares of Cliffs Natural Resources Were on Fire Today

By Travis Hoium - Apr 25, 2013 at 1:59PM

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Is this meaningful or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Cliffs Natural Resources (CLF 4.44%) jumped 17% today after the company released earnings.

So what: Revenue fell 6%, to $1.14 billion, and net income dropped 74%, to $97.1 million, or $0.60 per share after adjusting for one-time items. Analysts expected earnings of $0.32 per share, so the company did far better than expected, which is why the stock jumped. 

Now what: Cliff's may have beaten estimates, but the industry trends still aren't working in its favor. Global iron ore volumes fell 10% in the quarter and prices are down, which is why profit was so low. I'm not betting on an industry in decline and would sell the bump today.

Interested in more info on Cliffs Natural Resources? Add it to your watchlist by clicking here.

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Stocks Mentioned

Cliffs Natural Resources Inc. Stock Quote
Cliffs Natural Resources Inc.
$22.57 (4.44%) $0.96

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