Westmoreland Coal Co

Vale’s (VALE) focus in its coal division is on stabilizing the business, which is why it’s not bothered by the flat growth in production.

Vale (VALE) achieved production of 2.4 million tons of coal in the first quarter, which is 5.6% lower sequentially and in line year-over-year.

Vale (VALE) achieved an annual production record at Moatize of 11.3 million tons in 2017, which is 56% higher than in 2016.

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.

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.

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.

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.

Vale’s (VALE) coal EBITDA has been declining due to lower realized prices and higher tariff costs in the NLC (Nacala Logistics Corridor).

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.

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.

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 […]

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.

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 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.

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.

Vale’s (VALE) coal production in Mozambique reached a quarterly record of 3.2 million tons in 3Q17. This implies 38.3% YoY (year-over-year) growth.

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 (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.

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

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.

1H17 in review Majority of the coal (KOL) stocks began 2017 on a weak note. The stocks have not been able to recoup from the slump until now. They have been outperformed by the broader market and the VanEck Vectors Coal ETF so far in 2017. On September 19, 2017, Arch Coal (ARCH) has fallen […]

ARLP supplies coal to its customers by rail, barge, and truck. Its mines are in favorable geographic locations that minimize transportation costs for customers.

Alliance Resource Partners (ARLP) operates eight underground mining complexes in two regions: Illinois and Appalachia.

In this series, we’ll explore how Alliance Resource Partners has expanded its business and evaluate its key operational metrics and financial position.

Range-bound margins Since the majority of Westmoreland Coal’s (WLB) contracts are long-term cost-protected contracts, its margins are protected. Many contracts have high-margin reclamation. The company’s EBITDA[1.earnings before interest, tax, depreciation, and amortization] margins have remained between 10% and 26% during the last six quarters. This trend contrasts with that followed by other major coal producers (KOL) such as […]

Westmoreland’s Canadian operations Westmoreland Coal (WLB) acquired seven surface mines in Alberta and Saskatchewan, a stake in an activated carbon plant, and a char plant in Canada from Sherritt International in 2014. As of January 1, 2016, WLB’s Canadian operations are grouped as one entity, Prairie Mines & Royalty ULC. Its Canadian operations hold total […]

Business model Westmoreland Coal (WLB) has a different business model than American coal producer (KOL) peer Arch Coal (ARCH), Alpha Natural Resources (ANRZQ), and Peabody Energy (BTU). Contract Westmoreland Coal’s contracts are long term and cost protected. According to company filings, its weighted average contract life (contract life weighted by tonnage) extends to 2022. Low-cost supplier […]

In this series, we’ll analyze Westmoreland Coal’s (WLB) business model. We’ll explore how the company has expanded its business, and evaluate its key operational metrics and financial position.

In this series, we’ll explore how Cloud Peak Energy (CLD) has expanded its business and evaluate its key operational metrics and financial position.

WLB’s operating loss from its Canadian Coal Mining segment came in at ~$11.7 million compared to its operating income of ~$3.6 million in 2Q16.

Westmoreland Coal (WLB) announced its 2Q17 earnings results before market hours on August 3. WLB’s stock price fell nearly 14% during the intraday trading session on August 3.

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 […]

In 1Q17, Westmoreland Coal Company (WLB) spent $7.2 million on capital expenditure, which resulted in free cash flow of $42.6 million.

In 1Q17, Westmoreland Coal Company’s (WLB) revenue of $339 million beat analysts’ consensus estimate by 1.1%.

Westmoreland Coal Company (WLB) is expected to release its 2Q17 earnings results on August 3, 2017. Let’s take a look at its stock’s recent performance.

Teck Resources (TECK), the Canada-based diversified miner (EWC), is scheduled to release its 2Q17 earnings on July 25.

Analyst ratings According to recent data compiled by Thomson Reuters, of the nine analysts covering Cloud Peak Energy (CLD), two (or 22.0%) gave the company a “buy” or “strong buy” rating, and seven (or 78.0%) gave it a “hold” rating. There were no “sell” or “strong sell” recommendations. There have been no revisions in ratings […]

Teck Resources managed to post better-than-expected 4Q16 earnings.

Coal is one of the key commodities for BHP and contributes 21% of its revenues and 20% if its underlying EBITDA.

For 4Q16, Arch Coal (ARCH) reported revenues of ~$576 million compared to analyst estimates of $548 million.

Arch Coal (ARCH) announced its 4Q16 and fiscal 2016 earnings results on February 8. In this series, we’ll analyze ARCH’s 4Q16 results and compare its results with analysts’ expectations.

The majority of coal stocks began 2016 on a weak note. But they outperformed the broader market in 2016—mostly through gains in the second half of 2016.

In this series, we’ll do a comprehensive analysis of Natural Resource Partners’ (NRP) business model.

The price of coking coal, another steelmaking ingredient, has almost quadrupled since the start of the year.

Alliance Resource Partners (ARLP) revised its fiscal 2016 shipments guidance to 36.5 million–37.0 million tons from its prior guidance of 35.0 million–36.0 million tons.

Among the major coal mining companies, Peabody Energy (BTUUQ) has the highest level of debt on its books. On September 30, 2016, Peabody Energy had ~$8 billion in the form of consolidated debt.

On December 14, 2016, analysts had a consensus 12-month target price of $6.40 for Cloud Peak Energy (CLD).

The majority of coal (KOL) mining companies witnessed losses during 3Q16. However, Alliance Resource Partners (ARLP) remained profitable.

Westmoreland Coal (WLB) and Arch Coal (ARCH) witnessed an improvement in average coal sales price per ton sold on a YoY basis when compared to its peers.

The majority of coal mining companies witnessed a drop in their 3Q16 revenues due to lower demand for coal in both domestic and international markets when compared to 3Q15.

All major coal mining companies reported higher coal (KOL) shipments in 3Q16 compared to 2Q16. However, a majority of them reported lower shipments on a year-over-year basis.

Stocks of all major coal mining companies remained upbeat after the US election results on November 9, 2016. The recent rally in natural gas prices helped coal stocks continue their momentum so far in December 2016.

One of the major challenges for the global aluminum industry has been the rise in Chinese aluminum exports.

During their 2Q16 earnings calls, Century Aluminum (CENX) and Norsk Hydro (NHYDY) expressed concern over higher Chinese supply in the second half of the year.

The Republicans won the majority of the major coal-producing (KOL) states in the United States such as Wyoming, West Virginia, Kentucky, Pennsylvania, and Montana.

For 3Q16, Westmoreland Coal reported a record high adjusted EBITDA of about $71 million as compared to $48 million in 3Q15.

For 3Q16, Westmoreland Coal’s total coal (KOL) shipments came in at 13.9 million tons compared to 13.8 million in 3Q15 and 12.0 million tons in 2Q16.

Revenue from the company’s coal mining operations in the US came in at about $168.9 million compared to $132.0 million in 3Q15 and $151.4 million in 2Q16.

Westmoreland Coal (WLB) announced its 3Q16 earnings results before markets opened on November 1, 2016.

Alliance Resource Partners (ARLP) announced its 3Q16 earnings results before market hours on October 28. In this series, we’ll analyze the company’s 3Q16 results, compare the results with analyst expectations, and analyze the factors that caused deviation.

For 3Q16, Cloud Peak Energy posted adjusted EPS of $0.06, as compared to the analysts’ consensus estimate of -$0.12. Its stock price rose ~13% the same day.

For fiscal 2016, WLB has a coal (KOL) sales guidance of 53 million–60 million tons.

For 2Q16, WLB’s interest expenses came in at $29.2 million, as compared to $22.7 million in 2Q15 and $27.9 million in 1Q16.

Of the three analysts covering Westmoreland Coal (WLB), 100% (three analysts) gave the company a “buy” recommendation.

Westmoreland Coal (WLB) is expected to announce its 3Q16 results on October 21, 2016, before the market opens.

This series covers the latest EIA report for the week ended September 30, 2016. The natural gas inventory came in at 3,680 billion cubic feet, compared to 3,600 Bcf in the week ended September 23.

Most coal mining companies witnessed losses during 2Q16. Cloud Peak Energy’s adjusted net income rose from -$18 million in 2Q15 to $30 million in 2Q16.

Cloud Peak Energy reported positive growth in its 2Q16 EBITDA margins. Cloud Peak Energy’s EBITDA margins came in at 11.1% in 2Q16.

Of all the major coal mining companies, Alliance Resource Partners’ cost of sales per ton fell the most in 2Q16. It reported a 14% decline on a YoY basis.

Westmoreland Coal witnessed the highest growth in coal pricing compared to its peers in 2Q16. Most coal mining companies witnessed a drop in revenues.

The recovery in commodity prices helped coal stocks recover from their 1Q16 lows. High natural gas prices can have an indirect positive impact on coal stocks.

For 2Q16, Westmoreland’s interest expenses came in at $29.2 million, as compared to $22.7 million in 2Q15 and $27.9 million in 1Q16.

The 2Q16 operating income of Westmoreland’s Canadian Coal Mining segment was $4.2 million, as compared to $9.5 million in 2Q15 and $12.4 million in 1Q16.

Westmoreland Coal’s 2Q16 operating performance was dragged down by its Canadian Coal mining segment’s adjusted EBITDA of only $13.4 million.

Revenue from Westmoreland Coal’s US Coal Mining segment came in at about $151 million, as compared to $133 million in 2Q15 and $155 million in 1Q16.

In 2Q16, all of the reportable coal mining segments of Westmoreland Coal (WLB) witnessed a decline in coal shipments both on a YoY and QoQ basis.

Of the two analysts covering Peabody Energy (BTUUQ), both gave the company a “sell” rating. There were no “hold” or “buy” ratings for the stock as of July 13, 2016.

Peabody Energy (BTUUQ) is expected to announce its 2Q16 earnings results on July 26, 2016, after Market hours. In this series, we’ll look at analysts’ expectations for the company’s earnings.

According to its latest 10-Q filings, Westmoreland Coal (WLB) has about $1.13 billion of debt on its books as of March 31, 2016.

Analysts expect Westmoreland Coal to report EBITDA of $62.1 million and an EBITDA margin of 17.6%. This implies higher income from its ongoing operations.

Of the four analysts covering Westmoreland Coal (WLB), 100% or four analysts gave the company a “buy” rating. There weren’t any “sell” or “hold” ratings.

Westmoreland Coal reported about $349 million in consolidated revenues for 2Q15. Analysts estimate that it will report $353 million in 2Q16 revenues.

So far, Westmoreland Coal’s stock outperformed its peers in 2016. The recent rally in commodity prices helped the stock recover from its February lows.

Of the major coal (KOL) mining companies, Westmoreland Coal (WLB) is the only company to witness a rise in adjusted net income on a YoY (year-over-year) basis.

According to Westmoreland Coal’s (WLB) company filings, the acquisition of San Juan Coal in January 2016 helped WLB to report higher adjusted EBITDA in 1Q16.

Westmoreland Coal (WLB) reported an ~11% increase in average cost of coal sold per ton compared to fiscal 2014. The average cost per ton of coal sold came in at $21.50 compared to $19.30 during fiscal 2014.

Arch Coal (ACI) has narrowly escaped bankruptcy in 2015 so far. However, it may happen anytime, considering the dilapidated situation of Arch Coal’s finances.