SunCoke Beats Q3 Earnings, Sales Lag - Analyst Blog

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Coal mining company SunCoke Energy, Inc. ( SXC ) released its third quarter results with earnings per share of 9 cents beating the Zacks Consensus Estimate of 7 cents by 28.6%. Earnings however lagged the year-ago figure by 45 cents.

The year-over-year decline was primarily due to weak performance from the Coal Mining segment, the attribution of income to Suncoke Energy Partners, L.P .'s ( SXCP ) public unit holders and lower results at Indiana Harbor.

Total Revenue

SunCoke Energy's third quarter total revenue was $391 million, down 18.7% from $481 million a year ago.

The year-over-year decline in revenue was due to the pass-through of lower coal prices in its cokemaking business and a $46 per ton decline in the average coal sales price in Coal Mining segment.

Quarterly revenue was short of the Zacks Consensus Estimate of $421 million by 7.1%.

Operating Update

Cost of product sold and operating expenses in the third quarter 2013 was $316.5 million, decreasing 18.6% from the prior-year period.

However, selling and administrative expenses increased to $23.5 million from $20 million a year ago.

In the third quarter, SunCoke Energy sold 41 thousand tons of incremental coal than the prior-year quarter. However, the drastic decline in the price of coal per ton affected the margins of the company.

As a result, operating income declined 48.2% to $27.3 million. Interest expenses remained more or less in line with the year-ago quarter closing at $12.1 million.

Financial Update

Cash and short-term investments as of Sep 30, 2013 were $368.8 million versus $239.2 million as of Dec 31, 2012.

Long-term debt was $648.3 million as of Sep 30, 2013 compared with $720 million as of Dec 31, 2012.

Net cash provided by operations was $87.6 million in the first nine months of 2013, up $9.8 million from the prior-year period.

Guidance

SunCoke expects its domestic coke production in 2013 to be 4.3 million tons, while coal production is expected to hit 1.4 million tons.

Earnings per share for 2013 are expected in the range of 35 cents to 55 cents per share, with adjusted EBITDA between $215 million and $230 million.

Total capital expenditure in 2013 is expected to touch $130 million.

Other Upcoming Releases

Alpha Natural Resources ( ANR ) is scheduled to release its third quarter earnings before the market opens on Oct 31. The Zacks Consensus Estimate is currently at a loss of 76 cents per share.

Consol Energy ( CNX ) is scheduled to release its third quarter earnings before the market opens on Oct 31. The Zacks Consensus Estimate is at 3 cents per share.

James River Coal Company ( JRCC ) is scheduled to release its third quarter earnings before the market opens on Nov 7. The Zacks Consensus Estimate is pegged at a loss of $1.24 per share.

Our View

SunCoke was able to maintain its earnings beat, primarily due to an increase in coal sales volume. However, the significant decline in the per ton selling price of coal dented profits.

The high points of the quarter for SunCoke were the 10-year Indiana Harbor contract extension and a very recent acquisition which will strengthen its upcoming performance.

SunCoke Energy currently retains a Zacks Rank #3 (Hold). With a market cap of $1.33 billion, the company has 1,214 full time employees.



ALPHA NATRL RES (ANR): Free Stock Analysis Report

CONSOL ENERGY (CNX): Free Stock Analysis Report

JAMES RIVER CL (JRCC): Free Stock Analysis Report

SUNCOKE ENERGY (SXC): Free Stock Analysis Report

SUNCOKE ENERGY (SXCP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ANR , CNX , JRCC , SXC , SXCP

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