Settlement with ArcelorMittal USA propels Cliffs to $423 million net income in Q1
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Cleveland, Ohio-based Cliffs Natural Resources Inc. announced Thursday that net income in Q1 2011 jumped to $423 million compared to $77 million in Q1 2010. Higher prices in all of Cliffs' business segments-which include iron ore and metallurgical coal-as well as the favorable effect of Cliffs' settlement with ArcelorMittal USA drove the surge in Q1 2011 earnings. According to Cliffs, the settlement with the steelmaker added approximately $140 million in additional revenue in Q1.
In Q1 2011, revenues per ton for North American iron ore rose 77 percent year-on-year to $168.21 as cost per ton in the sector fell 19 percent to $56.63. The settlement with ArcelorMittal USA also reduced the cost of goods sold in by $54 million in Q1.
Looking forward, Cliffs expands demand for its products will remain strong through 2011 as rising global blast furnace utilization rates support a favorable outlook for another year of increase global steel production, led by China.
Joseph A. Carrabba, Cliffs' Chairman, President and CEO said, "During the quarter, we achieved another significant milestone in our long-term strategy for growth and diversification. Our pending strategic acquisition of Consolidated Thompson will further our position among the top 10 largest iron ore producers in the world. Today, with our increasing exposure to seaborne markets, we are well positioned to serve a diverse set of end markets."