On Thursday, Cliffs Natural Resources warned that in its upcoming fourth-quarter earnings report, due out after market-close on Feb. 13, it will be taking a $1 billion non-cash charge for goodwill impairment on its 2011 purchase of Thompson Iron Mines Limited. The company blamed "anticipated lower long-term volumes and higher capital and operating costs" at Thompson for most of the need to take the charge, but it added that a previously announced delay in phase 2 expansion of its Bloom Lake mine contributed to this impairment.
The company is recording additional charges to earnings as well, including:
- A $365 million loss on the sale of its stake in Amapa.
- $542 million in "valuation allowances" related to two deferred tax assets.
- $100 million to $150 million worth of "other charges related to its Eastern Canadian Iron Ore business segment."
In all, the charges add up to at least $2 billion, and perhaps as much as $2.06 billion. Divided among the company's 142.5 million shares outstanding, the charges should amount to approximately $14.40 per share. And speaking of shares, Cliffs closed the day down 3.1% on the news, at $36.04.
The article Cliffs Warns of $2 Billion in Charges to Upcoming Earnings originally appeared on Fool.com.Fool contributor Rich Smith and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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