Cloud Peak Energy Inc.
) reported earnings of 54 cents per share in the fourth quarter
2012 compared with 70 cents per share in the year-ago period. The
earnings underperformance can be attributed to weak coal market
fundamentals and weather variations. Cloud Peak Energy's earnings
however beat the Zacks Consensus Estimate by 8%.
GAAP earnings in the fourth quarter were 46 cents versus 72
cents in the year-ago quarter. The difference between GAAP and
pro forma earnings of 8 cents in the reported quarter was due to
a charge from derivative financial instruments.
For 2012, the company's adjusted earnings stood at $2.15 per
share compared with $2.47 in 2011. Full-year earnings also
surpassed the Zacks Consensus Estimate of $2.11.
GAAP earnings in 2012 were $2.85 versus $3.13 in 2011. The
difference between GAAP and pro forma earnings was due to a 58
cent gain from secondary offerings and a 12 cent gain from
derivative financial instruments.
Cloud Peak Energy recorded fourth quarter revenue of $374.8
million, down 6.8% from the year-ago figure of $402.5 million.
The revenue downturn resulted from a 6% decrease in mine site
sales and lower coal shipments. The quarterly top line fell short
of the Zacks Consensus Estimate by 9.0%.
Total revenue for 2012 registered a 2.3% drop to $1,516.7
million from $1,553.6 million in 2011. Revenue for 2012 lagged
the Zacks Consensus Estimate of $1,547.0 million.
The company's export for full year 2012 from the logistics
segment was roughly 5.8 million tons reflecting a slight decline
from year-ago levels on account of a decline in shipments through
the Ridley Terminal owing to a rise in rail costs.
On the cost side, the company's performance was favorable with
operating expenses declining 5.3% to $320.3 million from $338.5
million in the year-earlier period. The company's successful cost
containment initiatives in the face of reduced demand during the
quarter laid the path for declining expenditures.
Cost of product sold decreased 4.7% to $281.4 million from
$295.6 million at the end of Dec 2011. In spite of cost
management, operating income slid 14.8% year over year owing to
In 2012, total cost and expenses witnessed a similar movement
and fell 2.0% year over year to $1,274.9 million.
Adjusted Earnings before Interest, Tax, Depreciation and
Amortization (EBITDA) in the fourth quarter of 2012 stood at
$89.0 million versus $92.9 million in the prior-year quarter
while for full year 2012 it was $338.8 million versus $351.7
million in 2011.
Interest expense for the fourth quarter was $10.9 million
versus $6.3 million at the end of the fourth quarter of 2011.
Acquisitions & Agreements
Cloud Peak Energy received approval from the Crow Tribal
Legislature to jointly work with the Crow Tribe of Indians for
the development of 1.4 billion tons of Northern Powder River
Basin ("NPRB") coal. In addition, the company inked a deal to
sell off its 50% stake in the Decker Mine to Ambre Energy
including an option export of up to 5 million tons of yearly
capacity via Ambre Energy's proposed Millennium Bulk
Recently, Cloud Peak signed an option agreement with SSA
Marine to export up to 16 million tons of capacity through the
planned Gateway Pacific Terminal in Washington.
Cash and cash equivalents as of Dec 31, 2012 were $197.7
million compared with $404.2 million as of Dec 31, 2011. The
company's total available liquidity of $778.0 million indicates a
solid balance sheet position.
Cloud Peak Energy generated cash from operating activities of
$247.4 million in 2012 compared with $296.8 million in 2011.
Capital expenditures for 2012 were $103.7 million versus
$142.7 million in 2011. The company invested $7.4 million in port
Cloud Peak Energy estimates coal shipments in the range of
87-93 million tons. The company has contracted to sell 89 million
tons for 2013 out of which 81 million tons are contracted for
sale at a realized mine site price of $13.40 per ton. The company
expects costs to exacerbate and prices to remain at depressed
levels in 2013.
Adjusted EBITDA is forecast in the band of $230-$300 million.
Depreciation, depletion and accretion expenses are expected in
the range of $110 million to $120 million.
The company has proposed capital expenditures of about $80
million to $110 million for 2013.
Other Coal Company Releases
Arch Coal Inc.
) reported an operating loss of 42 cents per share in the fourth
quarter, wider than the Zacks Consensus Estimate loss of 14 cents
CONSOL Energy Inc.
) however posted earnings of 43 cents per share for the fourth
quarter, surpassing the Zacks Consensus Estimate of 22 cents.
Cloud Peak Energy yet again posted a positive earnings
surprise in the fourth quarter 2012. We believe the rising demand
for coal in the emerging economies of China and India will
certainly drive exports and reduce coal stockpiles. Moreover, the
company could benefit from normal winter weather that will push
up domestic demand and hence sales.
However, regulatory pressure and increased coal-to-gas switch
are threats plaguing the company. Cloud Peak Energy currently has
a Zacks Rank #3 (Hold).
Based in Gillette, WY, the company through its subsidiaries
engages in coal mining operations in the PRB. It produces and
sells sub-bituminous thermal coal with low sulfur content
primarily to electric utilities.
A Zacks Rank #1 (Strong Buy) operator involved in coal
DTE Energy Company
) whose earnings is yet to release.
ARCH COAL INC (ACI): Free Stock Analysis
CLOUD PEAK EGY (CLD): Free Stock Analysis
CONSOL ENERGY (CNX): Free Stock Analysis
DTE ENERGY CO (DTE): Free Stock Analysis
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