Cleveland-Cliffs (NYSE: CLF) reported second quarter 2019 results that exceeded analysts’ estimates. The company earned $0.63 per share on revenue of $743 million in the recently ended quarter compared to the estimated EPS of $0.52 and revenue of $622 million. Shares of Cleveland-Cliffs gained about 5% in the pre-market trading hours.
The iron ore mining company’s second quarter net income of $161 million, or $0.57 per diluted share, included a one-time $18 million loss on extinguishment of debt related to the proactive refinancing measures taken by the company, equating to $0.06 per diluted share.
“The New Normal in the global iron ore market has started to influence our results, offsetting weak steel prices in the United States during the second quarter. While the New Normal in iron ore is here to stay, the absurdly low prices for steel in the United States are just a temporary thing, and we should see higher steel prices going forward,” said CEO Lourenco Goncalves.
For 2019, the Cleveland, Ohio-based firm maintained its full-year sales and production volume expectation of 20 million long tons. Cliffs’ full-year 2019 Mining and Pelletizing cash cost of goods sold rate expectation is maintained at $62 to $67 per long ton.
Read: Nucor (NUE) reports a drop in Q2 earnings and sales
ADVERTISEMENT
The company now estimates to reach commercial production at its Toledo HBI plant ahead of schedule, in the first half of 2020. Due to the advanced construction timeline and more certain visibility of the start-up date, a portion of the budgeted contingency has been allocated. As a result, Cliffs’ 2019 total capital expenditures expectation was revised to $650-$700 million.
Cliffs stock had given a positive return of 41% since the beginning of 2019 and 24% in the past 12 months period.