Cliffs Natural Resources Inc. says it had record earnings for the third quarter. The company released results for the period ending Sept. 30, 2011 that show consolidated revenues were up 59%, a record $2.1 billion. Revenues of $1.3 billion were reported in the same quarter last year. The increase was driven by higher pricing and sales volumes in the Company’s iron ore segments, along with incremental sales from Cliffs’ recently acquired Bloom Lake operations in Eastern Canada .
Joseph Carrabba , Cliffs’ chairman, president and chief executive officer, said: “The execution of our growth and diversification strategy is on track and continues to gain momentum, despite the recent volatility in equity markets. With the combined contributions from our recently acquired Bloom Lake Mine , healthy demand for our products and a favorable pricing environment, we reported the most profitable quarter in our Company’s history. Relatively high seaborne iron ore pricing, increased year-over-year steel production in Asia and a stable market in North America all continue to support our strategically targeted expansion and growth initiatives.”
Third-quarter 2011 operating income was $820 million , an increase of 110% from the comparable quarter in 2010. Net income attributable to Cliffs’ common shareholders was $590 million , or $4.07 per diluted share, up nearly 100% from $297 million , or $2.18 per diluted share, in the third quarter of 2010. Net income attributable to Cliffs’ common shareholders in the quarter included a $17.5 million (net of tax), non-cash loss from discontinued operations related to the Company’s previously disclosed idling of its renewaFUEL biomass production facility in Michigan . Cliffs indicated that, during the quarter, its effective income tax rate was 2%, resulting from the benefits of tax planning and currency effects.
Also recorded in the quarter, Cliffs’ minority partner’s interest in Empire Mine increased from a negative equity position to a positive equity position due to the mine’s profitability, a direct result of the favorable pricing environment and previously settled price arbitrations. Accordingly, Cliffs, and Cliffs’ U.S. Iron Ore business segment, began to reflect its partner’s share of Empire Mine profits by recording a noncontrolling interest. The net impact of this was an approximately $83.3 million reduction to earnings attributable to Cliffs’ shareholders during the quarter, $67.9 million of which is related to prior-quarter adjustments within 2011 that were recognized in the third quarter.