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What’s to Come for Cloud Peak Energy

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Cloud Peak Energy’s 2017 guidance

Cloud Peak Energy (CLD) has lowered its 2017 adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) guidance range by $5 million, to $85 million–$105 million from $85 million–$110 million. Cloud Peak expects an increase in shipments in 2H17. The company has ~56 million tons contracted for 2017, with an anticipated realized price of $12.18 per ton.

The company has also reduced its capital expenditure guidance, from $20 million–$30 million to $20 million–$25 million. Cloud Peak expects the rail delays that reduced exports in 1H17 to be resolved in 2H17 and anticipates an increase in shipments in 2H17. It also expects exports of 4.5 million tons in fiscal 2017 and steady demand for the rest of the summer.

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Outlook

To sum up, 2Q17 was a positive quarter for Cloud Peak Energy in terms of revenue and shipments. Strong domestic and international demand resulted in better shipments, which led to higher revenue. The second half of the year looks upbeat, according to Wall Street analysts. Analysts expect Cloud Peak to report higher revenue in 3Q17 and 4Q17 than it did in 3Q16 and 2Q17.

President Donald Trump signed an order to repeal the moratorium on new federal coal leases, among other climate change reforms, on March 28, 2017. This repeal is expected to positively affect Cloud Peak Energy and other major coal (KOL) companies such as Arch Coal (ARCH), Alliance Resource Partners (ARLP), and Westmoreland Coal (WLB) in the long term.

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