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Why Cloud Peak Energy (CLD) Stock Is Down Today

Stocks in this article: CLD

NEW YORK (TheStreet) -- Cloud Peak Energy (CLD) was falling -8% to $14.46 Tuesday after lowering its full year 2014 coal shipment and adjusted EBITDA guidance.

The company said it now expects coal shipments of between 83 million and 86 million tons from its three owned and operated mines, down from its previous guidance of 85 million to 89 million tons for the year.

Cloud Peak Energy expects to report and adjusted EBITDA of $170 to $200 million for the full year, down from $180 million to $210 million. Preliminary estimates for adjusted EBITDA for 2015 could be about $120 million if coal prices remain low, the company said.

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TheStreet Ratings team rates CLOUD PEAK ENERGY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate CLOUD PEAK ENERGY INC (CLD) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.00, which illustrates the ability to avoid short-term cash problems.
  • Net operating cash flow has significantly increased by 224.09% to $22.57 million when compared to the same quarter last year. In addition, CLOUD PEAK ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -5.36%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • CLOUD PEAK ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, CLOUD PEAK ENERGY INC reported lower earnings of $0.85 versus $2.84 in the prior year. For the next year, the market is expecting a contraction of 92.9% in earnings ($0.06 versus $0.85).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 145.6% when compared to the same quarter one year ago, falling from $4.71 million to -$2.15 million.
  • You can view the full analysis from the report here: CLD Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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