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Thomson Reuters






July 25 (Reuters) - Miner Cliffs Natural Resources Inc
reported a lower second-quarter profit on Thursday due
to declines in global iron ore prices, but earnings topped
analysts' expectations and shares rose in after-market trading.


Cliffs, an iron ore and metallurgical coal producer,
reported weaker operating results that were partly offset by
income tax expenses of $9 million versus $42 million a year
earlier.


Revenue per ton fell across Cliffs' business segments, and
global seaborne iron ore prices dropped 11 percent.


Weakness in the steel market has hit relatively high-cost
iron ore suppliers like Cliffs hard. Its stock is the worst
performer on the S&P 500 this year to date, down more than 50
percent at Thursday's close.


The company bumped up its 2013 capital expenditure budget to
$1 billion from between $800 million and $850 million. It said
the increase was needed to address tailings and water management
issues at its Bloom Lake Mine in Quebec.


Bloom Lake was part of the Cleveland-based miner's takeover
of Consolidated Thompson Iron Mines Ltd.


Higher-than-expected costs at the mine have weighed on
Cliffs' earnings. Cliffs delayed a planned expansion last fall,
and in January it took a $1 billion goodwill write down related
to the Consolidated Thompson deal.


On Thursday, Cliffs also cut its sales forecast for the
Eastern Canadian Iron Ore segment, citing worse-than-expected
recovery rates and throughput at Bloom Lake.


It said it expects to sell between 8 million and 9 million
tonnes in 2013, down from its previous forecast of 9 million to
10 million tonnes, and at slightly higher-than-expected cash
costs.


Net income attributable to common shareholders dropped to
$133.1 million, or 82 cents a share, from $258.0 million, or
$1.81 a share, a year earlier. Revenue fell to $1.49 billion
from $1.58 billion.


Analysts, on average, had expected 61 cents a share on
revenue of $1.41 billion, according to Thomson Reuters I/B/E/S.


Cliffs shares rose 3.1 percent to $18.98 in after-market
trading.