Here's Why Shares of Cliffs Natural Resources Inc. Are Down 12% Today

What: Shares of Cliffs Natural Resources declined 12% today, a day after earnings were reported -- earningsthat looked good or bad depending on how you looked at them.

So what: It looked as though some investors out there were expecting big things from Cliffs in this most recent earnings report. Prior to yesterday's earnings release, the company's shares popped a surprising 27%.

Earnings were a bit of a mixed bag, though, and it may have taken a bit to sift through them. GAAP earnings per share came in at $0.39, which was way above expectations. However, much of these results came from its discontinued operations. On a continuing operations basis, EPS came in at a much more dismal loss of $0.21 per share. Also, the company was able to significantly cut operational costs, but at the same time it saw a huge decline in revenue that wiped out most of those gains.

It appears that the pre-earnings rally was a bit overdone, and shareholders responded today with the big pullback, and now shares are just about right back where they were at the beginning of the week.

CLF Price data by YCharts.

Now what: The stock movements over the past couple of days are just what is going to happen when a company's shares have declined so much over the past year. Even the slightest breeze can send shares on huge swings up and down.

Ultimately, though, the long-term outlook hasn't changed that much. Management is doing everything in its power to right the wrongs from previous decisions by divesting from unprofitable assets and cutting operational costs to their bare bones. It still needs to get out from underneath its burdensome debt levels, and a slight uptick in iron ore prices could do wonders for Cliffs in that regard. If you want to play this company as a potential turnaround target, do so at your own risk, because this could be a very, very bumpy ride.

The article Here's Why Shares of Cliffs Natural Resources Inc. Are Down 12% Today originally appeared on Fool.com.

Tyler Crowe owns shares of Cliffs Natural Resources.You can follow him at Fool.comor on Twitter@TylerCroweFool. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.