Wed, May 27, 2:56 PM
- A day after Credit Suisse warned that coal miners such as Arch Coal (NYSE:ACI) and Alpha Natural Resources (NYSE:ANR) were in "dire straits," Citigroup analysts say it will be "survival of the fittest" for the world’s coal miners.
- While Citi believes current coal prices are below sustainable long-run levels, it does not expect a return to prices anywhere near the levels seen a few years ago; the firm cuts its long-run thermal coal price forecast to $80/ton from $90 and its met coal price forecast to $125/ton from $170.
- The firm sees China and India as the largest sources of downside risk to its long-run forecasts, particularly for met coal, where China could re-emerge as a net exporter.
- Most coal stocks are extending yesterday's heavy losses: ACI -12.1%, ANR -11.1%, BTU +0.9%, CLD -1.7%, WLB -0.5%, KOL -0.3%.
Tue, May 26, 3:19 PM
- Credit Suisse analysts find little reason to favor coal equities amid a "dire outlook" for the group, initiating Arch Coal (ACI -12.2%) and Alpha Natural Resources (ANR -12.3%) with Underperform ratings and $0.50 share price targets, and Peabody Energy (BTU -5.8%) with a Neutral view and $4.50 target.
- ANR suffers the greatest liquidity risk, the firm says, as negative free cash flow and upcoming debt maturities eat into its existing liquidity position, while ACI fares somewhat better but still is likely to burn through cash for the next several quarters; both companies are limited in their ability to borrow more debt and both face revolver maturities in mid-2016.
- Cloud Peak Energy (CLD -0.9%) - the coal stock “least likely to cause sleepless nights” - is started with an Outperform rating and $11 price target.
- Adding to ACI's woes are Friday's news that the company is in talks with restructuring advisers as it looks to reduce its debt, and the receipt of delisting notice from the NYSE.
- KOL -2.4%.
Fri, May 22, 2:39 PM
- Alpha Natural Resources (ANR -2.5%) says it is idling mining and processing operations at its Rockspring Development's Camp Creek underground coal mine and plant in West Virginia, resulting in the loss of nearly 450 jobs.
- ANR says three other affiliated mine operators also would see workforce reductions.
- Imperial Capital recently suggested investors sell several of ANR’s bonds, despite yields of 40% or higher, on worries that recovery in bankruptcy would be minimal.
- Murray Energy reportedly is set to announce layoffs of ~1,800 workers at nine locations, dealing another blow to the coal mining industry in Appalachia.
Thu, Apr. 30, 2:58 PM
- Alpha Natural Resources (ANR -0.1%) trades with little change after reporting a bigger-than-expected adjusted Q1 loss after selling less coal at lower prices while also posting its first net profit in more than three years.
- Q1 revenue fell 24% Y/Y to $842M as sales volumes dropped more than 11%, and the coal miner says it expects prices for both steel-making and power generating coal to fall further this year.
- ANR maintains its 2015 shipment guidance of 69M-80M tons, including 14M-17M tons of Eastern metallurgical coal, 19M-23M tons of Eastern steam coal, and 36M-40M tons of Western steam coal.
- Says it may look to make additional cuts to its operations in an effort to meet or perhaps exceed its target of $60M-$75M in annual savings.
Thu, Apr. 30, 7:28 AM
Wed, Apr. 29, 5:30 PM
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Fri, Apr. 17, 5:13 PM
- Alpha Natural Resources (NYSE:ANR) reports that the NYSE has said its common stock does not satisfy one of the Exchange's standards for continued listing and trading.
- ANR has six months to regain compliance under the NYSE's rules, and plans to submit a plan outlining the actions it intends to take to do so.
Thu, Apr. 16, 12:58 PM
- Alpha Natural Resources (ANR -0.9%) may be forced to buy costly new insurance or otherwise ensure it can cover obligations for cleaning up any abandoned mines, West Virginia officials say.
- ANR has been allowed to leave ~$262M in cleanup liabilities uninsured in West Virginia under a federal program for coal companies that meet strict financial tests, but state officials now say the company may no longer qualify for such relief.
- Self-bonding has allowed ANR to avoid needing to have ~$676M of insurance on its mines in West Virginia and Kentucky, Reuters reports.
Fri, Apr. 10, 9:12 AM
Tue, Mar. 17, 12:59 PM
- The outlook for U.S. coal producers is "increasingly bleak," and the sector is likely to undergo a wave of bankruptcies, Macquarie Research warns as it forecasts U.S. coal prices (NYSEARCA:KOL) will no longer move in conjunction with international coal prices.
- The decoupling, which will feature declines in U.S. coal prices, will be a "necessary step to force rationalization on U.S. producers" but also likely will result in production cuts and bankruptcies, says analyst Anthony Young.
- Peabody Energy (BTU +4.8%) recently had to pay a 10% interest rate on bonds it issued, which Young says bodes badly for other coal producers, making it harder to refinance debt and leading to cuts and liquidity squeezes.
- Macquarie lowers its stock price targets on Alpha Natural (ANR -4.2%) to $0.60 from $1.15, on Arch Coal (ACI -1.9%) to $0.90 from $1.25, on BTU to $5.30 from $6.40, and on Consol (CNX -0.1%) to $29.50 from $31.50.
Thu, Feb. 26, 2:45 PM
- J.P. Morgan analysts see some encouraging signs for coal (NYSEARCA:KOL), which would be good news for companies such as Peabody Energy (BTU -5.7%), Cloud Peak Energy (CLD -5%), Alliance Resource Partners (ARLP +0.9%) and Foresight Energy (FELP -1.2%).
- Coal equities have bounced off lows, the JPM crew says, which meshes with its belief that the greater financial challenges faced by oil and gas E&Ps should reduce natural gas supply and help coal prices later this year and into 2016.
- JPM has Overweight ratings on the two MLP coal miners ARLP and FELP, which it expects to benefit as the gas market tightens in 2016 and with the added attraction of yield in a yield-starved world; BTU and CLD enjoy stronger balance sheets, which should see the companies through what could still be a sloppy coal market in 2015.
- Alpha Natural Resources (ANR -6.9%) and Arch Coal (ACI -4.3%), however, acquired so much debt that their equity effectively has become primarily an “option" on fluctuations in the coal market, the analysts say.
Thu, Feb. 12, 10:58 AM
- Alpha Natural Resources (ANR +9.1%) is sharply higher after reporting a smaller than expected Q4 loss on a 2% drop in revenues to $1.07B, which also topped expectations.
- The decrease in coal revenues was attributable to lower average realizations in all regions; adjusted cost of sales for ANR's eastern mines, spanning the Appalachian region in Pennsylvania, West Virginia and Kentucky, fell to $57.55/ton from $66.97 a year earlier.
- ANR is cutting its 2015 capex outlook to $225M-$275M from $275M-$350M.
- During Q4, ANR's metallurgical coal shipments totaled 4.9M tons, vs. 4.4M tons in the year-ago quarter and 4.8M tons in Q3 2014.
- For 2015, ANR expects to ship 69M-80M tons, including 14M-17M tons of eastern met coal, 19M-23M tons of eastern steam coal, and 36M-40M tons of western steam coal.
Thu, Feb. 12, 9:15 AM| Thu, Feb. 12, 9:15 AM | 5 Comments
Thu, Feb. 12, 7:53 AM
Wed, Feb. 11, 5:30 PM
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Tue, Feb. 3, 10:46 AM
- Arch Coal (ACI +8.9%) opens sharply higher after reporting a smaller than expected Q4 loss as it cut costs to $16.46/ton from $18.10/ton in the prior-year quarter.
- ACI says it is suspending its annual dividend to preserve current levels of liquidity, although Cowen analysts say the suspension will save only ~$2M/year.
- ACI says it had available liquidity of ~$1.2B at year-end 2014.
- Expects costs in the Powder River Basin and Appalachian region, which account for most of its coal production, to fall in 2015, reflecting an improved rail performance, the impact of lower diesel prices and a full year of steady production at its low-cost Leer mine in West Virginia.
- ACI also says it expects capital spending of $145M-$160M in 2015, roughly flat vs. 2014's $147M in capex.
- Forecasts FY 2015 coal sales of 130M-143M tons after selling 134.4M tons in 2014 and 35.2M tons in Q4 (+9% Y/Y).
- Other coal names also are higher: ANR +7.8%, BTU +5.6%, CLD +2.3%, WLB +2.6%, WLT +9.4%, CNX +1.7%, RNO +4.3%.
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