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Feb 9 (Reuters) - Iron ore producer Cliffs Natural Resources reported a quarterly profit that handily beat analysts’ estimates, driven by a surge in iron ore pellet sales.
The company’s shares were up 6.4 percent at $10.12 in premarket trading on Thursday.
Demand for iron ore pellets, a raw material used in making steel, is rising due to lower Chinese exports, anti-dumping measures and higher demand.
U.S. President Donald Trump’s $550 billion stimulus plan for infrastructure spending is expected to further boost demand for steel.
“A much more favorable business environment in the U.S. and a newly adopted rational behavior in the international iron ore market support the work we have done internally,” Chief Executive Lourenco Goncalves said in a statement.
The company said sales volume in its U.S. iron ore pellet business rose about 53 percent to nearly 6.9 million tonnes in the fourth quarter ended Dec. 31.
Cliffs Natural also said it expected sales volume in its U.S. iron ore pellet business to rise 4.3 percent to 19 million tonnes in 2017.
The company said net income attributable to shareholders was $79.1 million, or 34 cents per share, in the fourth quarter ended Dec. 31, compared with a loss of $60.3 million, or 39 cents per share, a year earlier.
Analysts’ on average had expected earnings of 23 cents per share, according to Thomson Reuters I/B/E/S.
Revenue rose 58.4 percent to $754 million, also above estimate of $675.2 million.
Cliff Natural’s shares had jumped more than five-fold in 2016. (Reporting by Muvija M in Bengaluru; Editing by Sriraj Kalluvila)