Alexis Tate

On December 18–22, the PRB and Illinois Basin coal prices remained at $12.10 per short ton and $32.60 per short ton, respectively.

On December 21, the EIA released the estimate of the coal volumes produced in the US for the week ending December 16.

On December 21, 2017, the price of Brent crude oil was $64.90 per barrel—up 2.6% from $63.23 per barrel recorded on December 15.

In the EIA’s STEO report, it predicted that the Henry Hub natural gas benchmark price would average $3.12 per MMBtu in 2018.

During the winter, the demand for natural gas increases in the US. In previous weeks, the supply continued to be below the five-year average.

KBR has an assorted mix of business portfolios, which helps it combat cyclicality associated with any single market.

Among its peers in the industrial (XLI) sector, KBR has the highest PBV ratio for 2017 at 2.95x. It’s followed by Fluor (FLR).

As of September 30, 2017, KBR (KBR) had a total debt of $2.7 billion against $3.4 billion at the end of fiscal 2016. Nearly $1.2 billion of that is currently payable.

Clients and their sectors KBR (KBR) has a diverse customer base. According to KBR, its customers are “domestic and foreign governments, international and national oil and gas companies, independent refiners, petrochemical producers, fertilizer producers and manufacturers.” Revenue from overseas operations represented 63%, 57%, and 51% of KBR’s total revenue in 2014, 2015, and 2016, respectively. In this part, we’ll look at […]

Classification of contracts KBR (KBR) generates revenue directly or indirectly from new contract awards. The deals KBR and peers (XLI) Jacobs Engineering (JEC) and Chicago Bridge & Iron (CBI) enter into are typically long term. KBR’s contracts are broadly classified as cost-reimbursable, in that prices can be changed depending on actual costs incurred for supplies, […]

Business segments KBR’s (KBR) business is classified into three core segments (government services, technology and consulting, and engineering and construction) and two non-core segments (non-strategic business and other business). Government services The government service segment’s primary focus is providing support solutions to US, UK, and Australian government agencies. According to KBR’s Form 10-K, the segment offers “full […]

Primary subsidiaries Previously, we discussed various acquisitions completed by KBR (KBR). Let’s now take a look at some of KBR’s subsidiaries and how they fit into the big picture for the company. Energy and construction Granherne, a KBR technology and engineering subsidiary, operates in the oil and gas industry. Granherne provides front-end engineering and design services […]

Consulting and technical services On January 12, 2016, KBR (KBR) acquired three of Chematur Technologies’ engineering subsidiaries—Weatherly, Plinke, and Chematur Ecoplanning Oy—for $24.5 million. Chematur is a Swedish chemical engineering company specializing in bioethylene technologies. It is owned by China-based aniline trader and producer Connell Chemical Industry. Through subsidiary Brown & Root Industrial Services, KBR acquired MEI […]

KBR’s acquisitions In 2016, four significant acquisitions were made by KBR (KBR) to reorganize its technology business, industrial maintenance welding, and government services under suitable market segments. In this part, we’ll look at KBR’s government service business expansion. Wyle acquisition On July 5, 2016, KBR acquired Wyle for $579 million, using nearly $200 million in […]

Strategic focus and restructuring In December 2014, KBR (KBR) revamped its operations to strengthen its global presence. From 16 business lines servicing many end markets, it narrowed its focus to only two end markets (hydrocarbon and government services) through three segments. Winding down In response to the reorganization plan, KBR sold off its building group […]

KBR (KBR), headquartered in Houston, Texas, is a comprehensive professional service and technology provider.

For the week ended December 15, Powder River Basin (or PRB) coal prices came in at $12.10 per short ton. PRB coal prices have remained at the same rate since November 10.

On December 14, the EIA (Energy Information Administration) issued its coal shipment estimates for the week of December 9.

On December 15, Brent crude oil settled at $63.23 per barrel—0.3% below the $63.40 per barrel reported on December 8.

The January 2018 US natural gas futures contract price settled at $2.74 per MMBtu (million British thermal units) while the Henry Hub natural gas spot price was $2.71 per MMBtu when the market closed on December 18.

Inventories are a significant driver of commodity prices. In this part of our series, we’ll focus on inventory levels for natural gas.

The coal prices in the Powder River Basin (or PRB) reached $12.10 per short ton for the week ended December 8, 2017.

For the week ended December 2, 2017, coal production rose sharply to 15.7 MMst (million short tons) from 14.1 MMst in the previous week.

On December 8, 2017, the price of WTI crude oil was $57.36 per barrel. This price was nearly 2.0% below the price of $58.36 per barrel when the market closed on December 1.

The January 2018 US natural gas futures contract price settled at $2.83 per MMBtu (million British thermal units) when the market closed on December 11, 2017.

According to EIA estimates, the natural gas inventory for the week ended December 1, 2017, is 3,695 Bcf (billion cubic feet). This reading is just 2 Bcf above the 3,693 Bcf recorded for the week ended November 24.

As of November 24, 2017, CBI stock has fallen 51% YTD due to earnings misses and a fall in profits.

Chicago Bridge & Iron Company (CBI) has a PB ratio of 1.41x based on its 2017 consensus estimates.

As of September 30, 2017, Chicago Bridge & Iron (CBI) had a total debt of $2.1 billion against $2.2 billion at the end of fiscal 2016.

In 2016, Chicago Bridge & Iron reported total revenue of $10.7 billion, which was 17.4% lower than $12.9 billion in 2015.

Chicago Bridge & Iron Company (CBI) currently has two operating groups catering to customers in the energy (XLE) infrastructure market.

On February 13, 2013, Chicago Bridge & Iron completed the acquisition of the Shaw Group for $3 billion. CBI paid $46 per share in cash and stock.

In this series, we’ll analyze Chicago Bridge & Iron’s (CBI) business model. We’ll explore how it has expanded its business and evaluate its key operational metrics and financial position.

Powder River Basin (or PRB) coal prices settled at $12.10 per short ton when the market closed on December 1, 2017. The prices were constant for all of November.

For the week ended November 25, coal production fell sharply to 14.1 mmst (million short tons) from 14.9 mmst in the previous week.

On December 1, 2017, the price of WTI crude oil was $58.36 per barrel. That was 1% below $58.95 per barrel when the market closed on November 24, 2017.

The EIA (U.S. Energy Information Administration), in its recent Short-Term Energy Outlook report, has projected the average Henry Hub natural gas spot price for 2018 at $3.10 per MMBtu.

According to EIA estimates, natural gas inventory for the week ended November 24, 2017, was 3,693 Bcf, which is 0.9% lower than 3,726 Bcf for the previous week.

Powder River Basin coal prices Powder River Basin (or PRB) coal stood at $12.10 per short ton on November 24, 2017. PRB coal prices have not changed for the last three weeks. PRB has surface mines, where sub-bituminous coal is mined. These surface mines, located in Wyoming and Montana, are in the lowest-cost coal mining region in […]

Weekly coal production Coal shipment estimates for the week ended November 18, 2017, were announced on November 22 by the EIA (U.S. Energy Information Administration). Coal acts as a key commodity for railroad companies such as Kansas City Southern (KSU) and Union Pacific (UNP). The report on weekly US coal production is based on railcar […]

Natural gas prices December US natural gas futures closed at $2.93 per MMBtu (million British thermal units), while Henry Hub natural gas settled at $2.82 per MMBtu on November 27, 2017. The Henry Hub figure was lower than the $3.05 per MMBtu reported on November 20, 2017. In its latest short-term energy outlook report, the […]

In this series, we’ll review the natural gas inventory levels as reported by the EIA (U.S. Energy Information Administration), and how they have impacted natural gas and coal prices.

In 3Q16, Yingli Solar (YGE) posted nearly $218.9 million in total revenues. Analysts estimate that it will report ~$242 million in revenues in 3Q17.

Currently, only one analyst is covering Yingli Solar (YGE) stock. The analyst gave the company a “sell” (or 100%) rating.

Yingli Solar will announce its 3Q17 earnings results on December 6 before market hours. Since its 2Q17 earnings, its stock price has fallen nearly 13.1%.

Power River Basin coal prices In the week ended November 17, 2017, PRB (Power River Basin) coal prices closed at $12.10 per short ton, the same price reported at the end of the previous week. PRB produces sub-bituminous coal from surface mines, which make it a low-cost coal mining area. These coal reserves are located in […]

Weekly coal production Coal shipment metrics for the week ended November 10, 2017, were released by the EIA (US Energy Information Administration) on November 16, 2017. Coal is a primary commodity for railway companies such as Union Pacific (UNP) and Kansas City Southern (KSU). Each week, US coal production information is issued based on railcar loadings. In […]

Crude oil prices On November 17, 2017, WTI (West Texas Intermediate) was at $56.55 per barrel, 0.3% lower than the $56.74 per barrel reported when the market closed on November 10, 2017. On November 17, 2017, Brent crude oil was down 1.3% week-over-week, settling at $62.72 per barrel. Prices fell partially due to doubts on whether […]

Natural gas prices On November 20, 2017, December US natural gas futures closed at $3.05 per MMBtu (million British thermal units), and Henry Hub natural gas spot prices settled at $3.05 per MMBtu, below the $3.12 per MMBtu posted on November 13, 2017. The EIA’s (US Energy Information Administration) latest short-term energy outlook report suggests […]

In this series, we’ll examine the natural gas inventory for the week ended November 10, 2017, and its effects on natural gas and coal pricing.

JA Solar Holdings (JASO) reported $12.1 million as interest expense for 3Q17 compared to $12.4 million in 2Q17 and $11.3 million in 3Q16.

JA Solar’s total cost of sales for 3Q17 was $575.4 million compared to $778.9 million in 2Q17 and $539.3 million in 3Q16.

In 3Q17, JA Solar reported total revenues of $652.6 million compared to $878.2 million in 2Q17 and $624.3 million in 3Q16.

On November 15, 2017, after market hours, JA Solar Holdings (JASO) announced its 3Q17 results for the quarter ended September 30, 2017.

Canadian Solar’s revenues from the sale of electricity in 3Q17 totaled $9.6 million, which was marginally lower than $9.8 million in 2Q17.

In 4Q17, Canadian Solar expects its solar module shipments to reach ~1.7–1.8 GW.

Canadian Solar (CSIQ) reported its 3Q17 earnings results on November 9. CSIQ declared earnings per share of $0.22, slightly below the analyst consensus estimate of $0.26.

During the week ended November 10, 2017, PRB coal closed at $12.10 per short ton, which was ~3% higher than $11.75 per short ton that coal maintained for the past five weeks.

The week ended November 4 witnessed an increase of 3.9% in coal production, from 14.5 mmst (million short tons) in the previous week to 15.0 mmst.

On November 10, 2017, the price of WTI crude oil closed at $56.74 per barrel. That was 1.9% higher than $55.64 per barrel when the market closed on November 3, 2017.

As of November 10, 2017, December US natural gas futures contract price closed at $3.21 per MMBtu. The Henry Hub natural gas spot price settled at $3.14 per MMBtu.

The EIA issued its natural gas inventory report on November 9, 2017. Natural gas inventory was 3,790 Bcf which is 0.4% more than 3,775 Bcf for the week ended October 27, 2017.

In 3Q17, Vivint Solar (VSLR) posted $34.7 million as its cost of revenue for its operating leases and incentives, higher than the $33.8 million in 2Q17 but lower than the $39.3 million in 3Q16.

Vivint Solar reported $75.1 million in consolidated revenue for 3Q17 compared to $73.0 million in 2Q17 and $41.3 million 3Q16.

Vivint Solar (VSLR) reported a cost per watt of $2.94 for 3Q17, higher than the $2.88 it reported in 2Q17 and $3.85 in 3Q16.

Vivint Solar posted $75.1 million in revenues in 3Q17, up by 82% on a YoY (year-over-year) basis.

SunPower (SPWR) reports its revenue under the power plant, residential, and commercial segments. The latter two segments are together called the distributed generation segments.

SunPower (SPWR) announced its 3Q17 earnings before market hours on November 2. In this series, we’ll examine SunPower’s 3Q17 results in detail and compare the results with analysts’ estimates.

The week ending October 28 witnessed a fall of 3.1% in coal production from 14.9 million short tons in the previous week to 14.5 million short tons.

Powder River Basin coal settled at $11.75 per short ton, while Illinois Basin spot coal prices closed at $32.60 per short ton.

As of November 3, 2017, Brent crude oil prices rose 2.1% on a week-over-week basis. Brent crude oil settled at $62.07 per barrel on November 3, 2017.

Strong natural gas prices might encourage utilities to use coal instead of natural gas. It could help coal (KOL) increase its market share.

On November 2, the EIA published the natural gas inventory report for the week ending October 27, 2017. The latest natural gas inventory is 3,775 Bcf.

Interest expenses for Westmoreland Coal (WLB) have gradually increased since 1Q15. In 3Q17, they were $30.0 million compared to $29.5 million in 3Q16.

Westmoreland Coal’s Coal-U.S. segment reported adjusted EBITDA of $34.3 million in 3Q17 compared to $38.0 million in 3Q16 and $23.7 million in 2Q17.

For 3Q17, Westmoreland Coal reported consolidated revenue of $358 million compared to $371 million in 3Q16. That’s 11% higher than $323 million in 2Q17.

For 3Q17, Westmoreland Coal posted 13.6 million tons in total coal (KOL) shipments compared to 13.9 million tons in 3Q16 and 11.0 million tons in 2Q17.

After its 3Q17 earnings release, Peabody Energy (BTU) increased its 2017 US sales guidance to 151 million–158 million short tons, from 148 million–153 million short tons.

According to recent company filings, the book value of Peabody Energy’s (BTU) indebtedness is ~$1.7 billion. In 3Q17, BTU repaid $300 million of its term loan.

On October 25, 2017, Peabody Energy (BTU) announced its 3Q17 earnings results. It reported adjusted diluted EPS of $1.47 against analysts’ estimate of $1.18.

Westmoreland Coal Company (WLB) affirmed its 2017 sales guidance after the second-quarter earnings were released on July 27.

All three Wall Street analysts covering Westmoreland Coal Company (WLB) gave the company a “buy” rating. There were no “sell” or “hold” ratings for the company as of October 27.

Arch Coal’s debt According to Arch Coal’s (ARCH) latest 10-Q filings, the book value of its long-term debt is ~$315 million, of which a term loan of ~$297 million is due for payment in 2024. It is also subject to quarterly principal amortization payments of $750,000. Arch Coal’s interest expenses were ~$6.0 million in 2Q17 […]

Arch Coal’s earnings estimates In 3Q16, Arch Coal’s (ARCH) adjusted EBITDAR (earnings before interest, tax, depreciation, amortization, and restructuring) were about $81.3 million, and its EBITDAR margin was 14.8%. Analysts expect the company to report EBITDAR of about $95 million in 3Q17 and an EBITDAR margin of 17.3%. A higher EBITDAR figure suggests higher income from […]

Arch Coal’s estimated revenue In 3Q16, Arch Coal (ARCH) reported consolidated revenue of ~$550.3 million. Analysts expect Arch Coal to post revenue of $550.7 million in 3Q17, a marginal increase of 0.06% year-over-year. The expected rise is primarily due to an anticipated increase in metallurgical coal shipments. Arch Coal expects its metallurgical segment to benefit from […]

Analysts’ ratings As of October 27, 2017, of the nine analysts covering Arch Coal (ARCH) stock, eight (89%) recommended “buy” or “strong buy,” and one (11%) recommended “hold.” There were no “sell” or “strong sell” ratings. Arch Coal’s price target Arch Coal’s 12-month target price was $94.88 as of October 27, 2017. The target price indicates an upside […]

Arch Coal (ARCH) is expected to announce its 3Q17 earnings results on October 31, 2017, before market hours.

Of the nine analysts covering Cloud Peak Energy (CLD), seven analysts rated its stock as a “hold,” and two gave CLD a “buy” or “strong buy” rating.

Cloud Peak Energy (CLD) is expected to announce its 3Q17 earnings on October 27, 2017, after market hours.

During the week ended October 20, 2017, coal spot prices from all the regions remained steady compared to their prices in the week ended October 13.

Coal is an important commodity for railway companies such as Union Pacific (UNP) and Genesee & Wyoming (GWR).

On October 20, 2017, WTI (West Texas Intermediate) crude oil prices closed at $51.47 per barrel.

As of October 23, 2017, Henry Hub natural gas spot prices closed at $2.94 per MMBtu (million British thermal unit).

Price fluctuations of natural gas affect US coal miners such as Arch Coal (ARCH), Cloud Peak Energy (CLD), Natural Resource Partners (NRP), and Peabody Energy (BTU).

On October 13, 2017, Brent crude oil prices settled at $57.17 per barrel, 3% higher than $55.60 reported during the previous week.

On October 16, the November US natural gas futures contract price was reported as $2.95 per MMBtu.

According to the latest company filings, the book value of Peabody Energy’s (BTU) debt as of June 30, 2017, after exiting from bankruptcy is $1.77 billion.

In 3Q15, Peabody Energy (BTU) reported $1.42 billion in revenues. Analysts anticipate that it will post $1.46 billion in 3Q17 compared to $1.26 billion in 2Q17.

Of the eight analysts covering Peabody Energy (BTU), six (or 75.0%) have given the company a “buy” rating, and two (or 25.0%) have given it a “hold.”

On December 2, 2016, GlobalWafers completed the acquisition of SunEdison Semiconductor for $683.0 million.