Cliffs Natural Resources Inc. (CLF) entered into a three-year tentative labor contract with the United Steel Workers (USW) union that will cover approximately 2,400 USW-represented workers at Cliffs’ Empire and Tilden mines in Michigan and its United Taconite and Hibbing Taconite mines in Minnesota. The contract is pending for ratification by the USW local union memberships.
Few days back, United States Steel Corporation (X) also reached a tentative agreement with the USW union on a new three-year contract, covering roughly 16,000 workers at the company’s domestic flat-rolled and iron ore mining facilities and tubular operations in Ohio and Alabama. This represented a positive development as it diminished the risk of work stoppages.
Cliffs Natural Resources Inc. is an international mining and natural resources company. In July, the company released its second-quarter 2012 results. The company posted earnings of $1.81 per share for the quarter, down from $2.92 a year ago. The results, however, outshone the Zacks Consensus Estimate of $1.75. Lower prices and higher costs led to the decline in earnings. Moreover, the year-ago quarter’s earnings were boosted by a sizable foreign currency hedging gain.
Sales for the quarter came in at $1,626 million, down 10% from $1,805.8 million in the prior-year quarter, missing the Zacks Consensus Estimate of $1,762 million. Higher labor, mining and maintenance costs and lower pricing led to the fall in revenues in the reported quarter.
Cliffs, which competes with CONSOL Energy Inc. (CNX) and Alpha Natural Resources, Inc. (ANR), currently retains a Zacks #5 Rank, reflecting a short-term (1 to 3 months) Strong Sell rating. Currently, we have a long-term (more than 6 months) Neutral recommendation on the stock.
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