Steel was on Sale: Cleveland-Cliffs up

Cleveland-Cliffs Inc (NYSE:CLF) shares jumped 20% today after raising their revenue outlook.  We told you Steel is on sale: Nucor, Cleveland-Cliffs and more on July 3rd, CLF is doing a number on the market today just like a good fake ID can do at your local liquor store.

Here's the details from www.crainscleveland.com

Cleveland-Cliffs Inc. (NYSE: CLF) has raised its estimates of how much its iron ore will fetch in the key global markets the company supplies and how much it will cost to produce.

Cliffs said its Asia-Pacific Iron Ore segment is expected to achieve average revenue per tonne of about $102 in 2008 based on its anticipated product mix. This is an 87% increase from the previous year, and up from the company’s previous guidance of $89 per tonne.

Cliffs expects costs per tonne in the Asia-Pacific Iron Ore segment of approximately $55. The increase from the company’s previous expectation of $53 per tonne is primarily the result of higher expected royalty payments, along with increased energy costs. Production volume is expected to be 7.8 million tonnes, with expected sales volume of 8.0 million tonnes.

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In Cliffs’ North American Iron Ore segments, the company is estimating revenue per ton of $85 for 2008, compared with its previous guidance of $81 per ton. Cliffs expects 2008 North American Iron Ore costs per ton to increase approximately 16% compared with 2007 to about $56 per ton. The increase from the company’s previous expectation of $53 per ton is primarily the result of rising energy costs and higher royalty payments than previously projected.

Cliffs also disclosed its 2009 pricing expectations for its North American Iron Ore segment, which sells almost all its production under long-term supply agreements. Cliffs indicated that, assuming no change in world pellet prices in 2009 and no changes in producer price indices or steel pricing, the average realized 2009 price per ton would be approximately $107. The estimated 26% increase compared with the expected 2008 average price is based on contractual base-price adjustments, lag-year adjustments and price caps contained in the company’s current supply agreements.

Wall Street is McLoving the news today, sending CLF shares back up to $109.  There's still room for this stock to move if you can believe what the analysts say about the current share price.  The average target price on Cleveland-Cliffs shares is around $125, let's review the analyst take:

Better yet, let's get a good look at that ID: 

Disclaimer: The author has a long position in CLF.