Cleveland-Cliffs (NYSE: CLF) is on better footing again. The company reported fourth-quarter profits, though revenue slid decisively. Cliffs earned $1.07 a share on revenue of $601 million. Dig deeper on the results and realize that after the tax payment, the company earned around $0.21 a share.
Cliffs’ results should imply that AK Steel (NYSE: AKS) will also report a good quarter. Further, the company cut debt from $1.8 billion in Q4/2016 to $1.3 billion.
2018’s outlook is uplifting, too. Cliffs should earn around $35 - $40 margin per ton in USIO. Operating profits for the year could top around $600 million. At an EBITDA of $700 million and interest of $150 million, Cliffs could earn at least $1.50 a share this year.
When the $250 million tax refund is accounted for, Cliffs’ book value will improve this year. For this year, the company forecast sales and production volumes of around 20 million long tons from its U.S. business.
To cut costs, it will speed up the planned closure of its mining operations in Australia. Unfortunately, the asset sale will probably net no more than $200 million. This will get factored in as goodwill but the company removes a losing unit from its business.
