TORONTO (miningweekly.com) – NYSE-listed iron-ore producer Cliffs Natural Resources on Wednesday said adjusted net income for the first three months was 26% lower year-on-year as lower iron-ore sales impacted on revenue.

Net earnings, excluding one-off items for the quarter ended March 31 totalled $89-million or $0.60 a share, compared with $121-million or $0.85 a share in the same quarter a year earlier. Analysts on average expected adjusted earnings of $0.32 a share.

Net income was $97.1-million or $0.66 a share, down from $375.8-million or $2.63 a share, a year earlier, which included a $255-million tax benefit.

Consolidated revenue of $1.1-billion was 6% lower than that of the same quarter a year earlier, driven down by a 10% decrease in global iron-ore sales volumes, which contributed to a 2% decrease in cost of goods sold to $903-million.

The Cleveland-based producer of iron-ore and metallurgical coal said global seaborne iron-ore pricing for a 62% iron fines product, a significant factor in the company's profitability, remained relatively flat, averaging $148/t, an increase of 3% over the first quarter of 2012.

The company said a customer becoming bankrupt in May negatively impacted its US iron-ore segment. In Canada, Cliffs in March said it would idle its Wabush Pointe Noire plant, in Quebec, by the end of the second quarter to reduce costs as iron-ore prices remained weak. Weak demand from China, the world's largest producer and consumer of steel, along with a persistently oversupplied market has sent iron-ore prices down.

The first-quarter Asia Pacific iron-ore sales volume decreased by 17% to 2.3-million tons, from 2.8-million tons in 2012's first quarter. The decrease was attributed to vessel timing and the absence of sales volume from Cliffs' Cockatoo Island operation, in Australia, which was shuttered during the third quarter of 2012.

The company’s North American coal sales volume was 1.8-million tons, which was a 27% increase from the 1.4-million tons sold in the same period a year earlier. The increase was driven by significantly higher sales volume from Cliffs' Oak Grove mine. During 2012's first quarter, Oak Grove's preparation plant and load-out facilities were not fully operational due to severe weather damage in 2011.

Coal prices, however, declined by 9% to $110.35/t.

Cliffs said it expected pricing for the commodities it sells to remain volatile, with the potential to significantly decrease or increase at any point in time.

Cliffs said talks with the Ontario government on its Black Thor chromite project in Canada's Ring of Fire mining district remaindedl suspended since January, when a new premier took office.

"Cliffs will not pursue approving the transition of the project to execution until key elements supporting economic viability are resolved," the compay said. It added it would continue its environmental assessment and consultations.

The company’s NYSE-traded stock closed up 5.20% at $18.22 apiece.