Market Overview

Cliffs Natural Falls After Fourth-Quarter and Full-Year Results

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Shares of Cliffs Natural Resources (NYSE: CLF) plunged in Tuesday's after hours trading session after the company cut its dividend, announced a share offering and released its fiscal fourth-quarter and full-year results.

The stock was last trading down around 7.50 percent to $33.86.

For the fourth-quarter, the company reported a net loss of $1.6 billion or $11.36 per share, versus net income of $185 million or $1.30 per share, in the year ago period. The company's loss was primarily attributable to a non-cash impairment charge of $1 billion in goodwill related to the company's acquisition of Consolidated Thompson Iron Mines Limited.

On a non-GAAP basis, net income was $89 million or $0.62 per share, versus $213 million or $1.49 per share, in the fourth-quarter of 2011. This compared to analysts' consensus estimates of $0.58 per share.

Revenue in the quarter was $1.5 billion versus $1.66 billion last year. This missed Wall Street consensus revenue estimates of $1.53 billion.

For the full-year, the company reported a net loss of $899 million or $6.32 per share, versus net income of $1.6 billion or $11.48 per share, in fiscal 2011. On a non-GAAP basis, CLF reported net income attributable to Cliffs' shareholders was $493 million or $3.45 per share, versus $1.6 billion or $11.68 per share, last year.

In addition, the company announced that it was cutting its dividend to $0.15 per quarter from $0.625 per common share previously. This represents a dividend cut of 76 percent.

Joseph Carrabba, Cliffs' chairman, president and chief executive officer, said, "While 2012 had some noteworthy highlights, including the operational turnaround of North American Coal and record sales volumes in Australia, the year proved to be challenging both from a market perspective and operationally."

Cliffs also announced a public offering of its shares after the closing bell. The company announced that it is offering to sell, subject to market and other conditions, 9,000,000 of its common shares, and 20,000,000 of its depositary shares.

Cliffs shares have fallen around 50 percent over the last year despite a strong market environment and the stock has been in an extended downtrend since topping out at $100 in 2011. Year-to-date, shares closed Tuesday's trading session down 5 percent prior to amplifying those losses in the after hours.

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