UPDATE 1-Cleveland-Cliffs Q1 profit falls

(New throughout)

NEW YORK, May 5 (Reuters) - Cleveland-Cliffs Inc (CLF.N: Quote, Profile, Research, Stock Buzz), North America's largest producer of iron ore pellets and a major supplier of steel-making coal, said on Monday its first-quarter profit fell sharply despite record revenue.

The Cleveland-based company said net income fell to $16.7 million, or 32 cents a share, from $32.5 million, or 62 cents per share, in the year-earlier quarter. Operating income fell to $42.6 million from $44.9 million.

Analysts had on average expected the company to earn $1.00 a share in the quarter, according to Reuters Estimates.

Revenue rose 52 percent to a record $494.4 million, driven by a coal business acquired in July 2007 and sharply higher iron ore prices.

Yet profit slumped after a $6.9 million loss in its Amapa Iron Ore Project. Cleveland Cliffs estimated that it would recognise $55 million of revenue in a future quarter related to iron ore sales during the quarter that did not settle.

The company paid out higher taxes, a 35 percent rate compared with 27 percent a year earlier, due to greater sales outside the United States.

Cleveland-Cliffs also said earnings were reduced by higher costs, a legal charge and additional corporate development in Latin America and the Asia-Pacific region. (Reporting by Joseph A. Giannone; Editing by Alan Raybould)