Cliffs shares advance after 2nd-qtr profit beats Wall Street expectations

Cliffs shares rise after 2Q profit beats street

NEW YORK — Shares of Cliffs Natural Resources Inc. rose in afternoon trading a day after it posted second-quarter earnings that beat Wall Street expectations.

Cliffs shares climbed $2.20, or 8.9 percent, to $27.04.

The mining company reported a second-quarter profit of $45.5 million, or 36 cents a share, which surprised analysts who expected a net loss of 33 cents a share, according to a survey by Thomson Reuters. Analysts typically exclude one-time items. The most recent results reflected a $79.3 million pretax gain, or 44 cents a share after taxes, related to contract adjustments and a $17.6 million income tax benefit.

BMO Capital Markets raised its rating for the stock to “Outperform” from “Market Perform.”

KeyBanc analyst Mark Parr raised his full-year estimate for the company to a loss of 25 cents per share from a loss of 65 cents per share, citing one-time gains.

Parr said he expects a weaker second-half 2009 outlook, given materially weaker volume assumptions for North American ore and weaker price and cost dynamics in Asia-Pacific ore, Sonoma coal and North American coal.

Parr rates the stock “Hold,” with a $24.85 price target.