Cloud Peak Energy Inc. (NYSE:CLD) Keeps Up Its Post-Earnings Momentum


Coal miner Cloud Peak Energy Inc. (NYSE:CLD), which saw sharp gains last week after it declared an earnings beat and issued upbeat guidance, continued its uptrend yesterday.

Shares closed Monday at $6.16, up 2.5%, on volume of 2.28 million.

The company has benefited from the bullish trend in thermal coal prices. Reuters reported early this month that physical thermal coal prices touched their highest levels since 2014, after China placed an embargo on coal production and changed its rules for the transportation of the mineral.

“Recently, we have been able to capitalize on improved international thermal coal prices by contracting approximately one million tons to be shipped between November 2016 and February 2017,” said Colin Marshall, President and Chief Executive Officer in a statement. “We are optimistic that we will be able to ship additional export tons in 2017.”

Cloud Peak Energy Inc. (NYSE:CLD) in Q3

During its third-quarter, Cloud Peak Energy reported EPS of $0.06 which beat by $0.23, and revenue of $217.1 million, which missed by $5.04 million, and was down 28% year-on-year.

“Strong summer electricity demand and increased natural gas prices caused many of the company’s customers to operate their coal units at full capacity,” the company said in a statement. “This increase in consumption resulted in customers drawing down their inventories and focusing on taking their contracted coal this year.”

Nevertheless, Cloud Peak Energy swung from a net profit of $8.9 million in the September 2015 quarter to a net loss of $1.6 million in the third quarter 2016.

Operational Cash flow during the quarter was $48.5 million compared to $47.2 million in the prior year quarter. As at September 30 the company had cash and cash equivalents of $90.3 million and available liquidity of $448.5 million.

Cloud Peak Energy Inc. (NYSE:CLD) guidance

The rosier outlook for the future prompted the company to revise its 2016 EBITDA guidance to a range of $90 million-$100 million from the earlier projection of $75 million-$95 million.

“I am also looking for the recent increase in domestic prices and RFPs issued by customers to continue so we can layer in profitable sales for next year and beyond,” said Marshall. “At the same time, the financial transactions we have completed improve our balance sheet and financial flexibility.”


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