Cliffs Natural Resources says it will make money in 2014 despite its first quarter losses and its struggles with a hedge fund that wants to split the company.
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View full size CLEVELAND, Ohio -- Cliffs Natural Resources, a mining company with roots almost as old as Cleveland, lost money during the first three months of the year.
Worse, the red ink comes at a time when Cliffs is facing a challenge from one of its shareholders, Casablanca Capital LP, a New York-based hedge fund that wants Cliffs to split its international operations.
Casablanca, which has acquired 5.2 percent of the company's shares, on Thursday demanded Cliffs hold its annual shareholder meeting by June 4 or it would call for a special meeting for the election of the board of directors.
Cliffs' Chief Executive Officer Gary Halverson and Terry Paradie, CFO, will talk about the losses and probably face questions about Casablanca at a 10 a.m. teleconference today. The conference is available to the public live over the company's website.
Cliffs, the nation's largest iron ore producer and a global producer of metallurgical coal for steel making, reported an $83 million net loss, or 54 cents per share, for the quarter compared with a net profit of $97 million, or 66 cents per share, during the first quarter of 2013.
Sales for the quarter were $940 million, a decrease of $201 million, or 18 percent, compared to the first quarter of 2013.
The company blamed a decline in demand for iron ore and metallurgical coal because of the weather as well as significant prices cuts.
"The first-quarter's winter weather in North America was some of the worst conditions we have experienced in 30 years," Halverson said in a statement released late Thursday after markets closed.
"Despite this, we are maintaining our full-year 2014 sales and production volume guidance, as well as our cash-cost outlook in all of our North American business segments," he said.
For 2013, Cliffs' net profits were $414 million, or $2.37 per share, on total sales revenues of $5.7 billion.
In 2012, the company recorded a net loss of $899 million, or $6.32 on total sales of about $5.9 billion.
