Replies to post #6429 on The Rising Influence of Rising Affluence

[dewophile]

CLF

the non-cash write-down of deferred tax assets caught me by surprise and like you say in #msg-83777212 it suggests a tempered forward guidance at the next conference call...

i think it will be important to see how much of this is due to anticipated pricing of IO longer term vs operational issues. if mainly due to the former then upside surprises in IO prices may guide the stock higher

The cash write down relating to the Quebec iron-ore business is consistent with the recent trend in announcements from CLF

what do you think this could be due to specifically? 150M is not chump change for a company this size. the only positive i can think is if it is related to idling wabush which has been bleeding money

loom Lake costs would be reduced by 1/3 to $60-65/ton by the end of Dec 2012 (detailed in #msg-78258185). The chances of this having happened seems unlikely since most of that cost saving was attributed to a likely production volume increase that would dilute fixed costs. ....

the 60-65 was based on achieving 7.2M ton annual run rate. they said they will produce 7M in 2013. it was not related to the ramp up to 14+M (and in fact they mentioned there were not many synergies to be gained from phase 2 expansion)

re the dividend - i agree it will further hurt managemnts credibility 0 and likely hit the stock price hard - but let's admit it - the dividend was reckless and is it so bad to undo a poor business decision? if the dividend is coming at the cost of growng the company then i think a cut makes sense. the nagain Io prices are pretty high so my hunch is they may wait to make this decision

given the volatility in IO prices what i woudl like to see from management most in terms of guidance is how they will perform at various IO prices - give us a base case at a reasonable average price, then how they woudl handle a stressed IO pricing environment say 20 bucks lower, and upside if price averages 20 higher. that would really help me as an investor gauge performance moving forward (and hope that they ahve plan in place to get through the stressed pricing scenario)

lastly, while i agree with dd the writedown on the CT acquisition is meaningless from a business perspective, it does quantify by how much management admits they overpaid for the asset - and it is by quite alot - especially for a company this size