Refining input is the main source of demand for crude oil. So refining throughputs will affect inventory levels not just for crude oil but also its refined products, like gasoline and distillates.
On November 26, the US Energy Information Administration (or EIA) released inventory data for the week ended November 21. Inventories increased by 1.95 million barrels.
Analysts had expected an increase of 250,000 barrels in crude inventories last week. We’ll discuss actual changes in inventories in this series.
Arch Coal has over 70% more debt on its books than revenues expected in 2014. That’s a lot when you consider that most coal producers aren’t making money.
Barring the idling of the Cumberland River Complex, the quarter was uneventful. Arch Coal underperformed compared to most estimates—except for revenue.
Arch Coal expects to burn around $200 million in free cash in 2014, meaning that 4Q 2014 free cash flows may come in around -$80 million.
Arch Coal reported net losses from operations of $97.2 million (46 cents a share) in 3Q 2014—down from 3Q 2013’s $207.8 million net loss (98 cents a share).
Arch Coal (ACI) reported $742.2 million in revenues in 3Q 2014, 6.2% lower than 3Q 2013’s $791.3 million. Appalachian segment revenues saw an uptick.
Management called the bituminous thermal segment “the real star” in the conference call for its 3Q14 earnings. The segment has done well on the cost front.
Arch Coal’s (ACI) western bituminous segment consists of the West Elk mine in Colorado (Western Bituminous) and the Viper mine in Illinois (Illinois basin).
Arch Coal (ACI) generated $389.4 million from its Powder River basin (or PRB) segment in 3Q 2014, down from 3Q 2013’s $420.5 million. The drop in revenues was a result of lower shipments.
Arch Coal runs two surface mines producing thermal coal in the Powder River Basin (or PRB) in Wyoming. Black Thunder is the second-largest coal mine in the US.
Arch Coal (ACI) generated revenues of $272.4 million from Appalachia in 3Q 2014, marginally up from 3Q 2013’s $263.2 million.
The company produces both thermal and metallurgical coal (used in steelmaking) from its seven active mines in the Appalachian region.
Among major coal producers (KOL) in the US, Arch Coal Inc. (ACI) is probably the most diversified in terms of geographic and product profile.
Now that AES Corporation’s earnings for fiscal 2014 are anticipated to be lower than earlier estimates, the guidance range for fiscal 2015 has been lowered by $0.05 per share.
This year, AES has been trading at a price-to-earnings ratio of 10.0x and an EV/EBITDA ratio of 6.5x. These are the lowest ratios in the power industry.
AES Corporation (AES) had a total debt of $21.07 billion as of September 30, 2014. A major portion of this debt comes from long-term borrowing.
AES raised dividend payments by 25% this year compared to last year. In 2014, AES will pay $145 million or 29% of the company’s FCF as dividends.
Given the nature of its business, AES Corporation (AES) faces risks relating to currency fluctuations, fuel prices, interest rates, and a scattered business model.