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Why Did Cloud Peak Energy’s Stock Surge 13% on Its 3Q16 Results?

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Earnings announcement

Cloud Peak Energy (CLD) announced its 3Q16 earnings results after market hours on October 27, 2016. In this series, we’ll analyze the company’s 3Q16 results in detail, compare its earning results with analyst expectations and analyze the factors that caused any deviation. We’ll also have a look at the management’s guidance, analyst expectations for 2016, and an outlook for the company.

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Cloud Peak Energy’s stock price reaction

Cloud Peak Energy posted a strong operational performance for 3Q16. The company reported an adjusted EPS (earnings per share) of $0.06, as compared to the analysts’ consensus EPS estimate of -$0.12. Better-than-anticipated 3Q16 results and upgraded fiscal 2016 guidance led Cloud Peak Energy’s stock price to rise nearly 13% during the intraday trading session on October 28, 2016.

Peer Performance

On the day of Cloud Peak Energy’s earnings release, peers Alliance Resource Partners (ARLP) and Westmoreland Coal Company’s (WLB) rose nearly 2% and 3%, respectively, whereas Peabody Energy’s (BTUUQ) stock lost nearly 5% during the intraday trading session. The broader coal market tracked by the VanEck Vectors Coal ETF (KOL) closed nearly flat, and the SPDR S&P 500 ETF (SPY) closed nearly unchanged.

The recent rally in coal and natural gas prices helped the stocks of major coal mining companies such as Cloud Peak Energy (CLD), Alliance Resource Partners (ARLP), and Westmoreland Coal (WLB) to recover from their February lows.

Next, we’ll look at Cloud Peak Energy’s coal shipments for 3Q16.

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