Cliffs Natural Resources’ Q2 2016 Earnings Review: Success Of Cost Reduction Initiatives And Recovery In Iron Ore Demand Bode Well For The Rest Of The Year
Cliffs recorded a significant year-over-year improvement in its second quarter results, which primarily indicates the success of the company’s cost reduction initiatives, as reflected in its cash production costs. Cliffs undertook concerted efforts to lower its production costs last year in order to combat a subdued iron ore pricing environment. A rationalization of repair and maintenance, energy, and labor costs helped the company’s U.S. Iron Ore operations rein in its production costs whereas operational improvements and the rationalization of labor and administrative costs helped lower production costs at the Asia Pacific Iron Ore operations. Given the improvement in the prospects of the domestic steel industry, partly as a result of regulatory intervention that resulted in the dissipation of competition from cheap steel imports, Cliffs’ U.S. iron ore shipments are set to rise in 2016. An improved demand environment combined with lower-cost operations bodes well for the company for the rest of the year.
Have more questions about Cliffs Natural Resources? See the links below.
- What Is Cliffs Natural Resources’ Fundamental Value Based On 2015 Results?
- What Is Cliffs Natural Resources’ Revenue And EBITDA Breakdown?
- How Has Cliffs Natural Resources’ Revenue Composition Changed Over The Last 5 Years?
- By What Percentage Did Cliffs Natural Resources’ Revenue & EBITDA Decline Over The Last 5 Years?
- By What Percentage Can Cliffs Natural Resources’ Revenue & EBITDA Change Over The Next 3 Years?
- How Will Cliffs Natural Resources’ Revenue Composition Change by 2020?
- How Do Cliffs Natural Resources’ Margins Compare With Those Of Iron Ore Mining Giants Such As Rio Tinto And Vale?
- Why ArcelorMittal Is The Most Important Customer For Cliffs’ U.S. Iron Ore Sales
- What’s New With Cleveland-Cliffs Stock?
- What’s Happening With Cleveland-Cliffs Stock?
- Why We Are Raising Our Price Estimate For Cleveland-Cliffs Despite A Weak Q4
- With Contracted Prices For 2023 Up, Is Cleveland-Cliffs Stock A Buy?
- Company Of The Day: Cleveland-Cliffs
- What To Expect From Cleveland-Cliffs Q3 Results?
Notes:
See More at Trefis | View Interactive Institutional Research (Powered by Trefis)