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Coal Stocks Queued up to Report Q3 Earnings: CLD and ARLP
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The Q3 earnings season is picking up pace and we have seen earnings releases by 116 S&P 500 members so far. Reported earnings were up 3.3% year over year on 1.8% higher revenues. This will probably be one of the busiest weeks of this earnings season, with 810 companies (including 171 S&P members) lining up to release financial results.
For the remaining index members, projections are of a 0.1% improvement in earnings on 1.5% higher revenues despite the expectations of a 72.6% plunge in earnings on 12.2% deterioration in revenues for the energy space. Notably, this could be the first quarter to record positive earnings growth after five quarters of back-to-back declines.
Seven out of the 16 sectors in the Zacks coverage universe are expected to witness earnings decline this season. Read more details in our weekly Earnings Preview report.
Let’s focus on the coal industry, which is currently facing stiff competition from natural gas and alternate sources of energy. The fossil fuel is also grappling with challenges posed by the new emission standards that are compelling utilities to reduce dependence on coal for power generation. As a result, production and consumption of coal in the U.S. has been witnessing a steady decline.
But all hope is not lost for this space as a projected upside in natural gas prices will lead to higher coal burn in 2017. Per an EIA report for the Jan 2015–Apr 2016 period, nearly 87 GW of coal-fired plants have installed pollution control equipment to comply with the new emission standards, while many others are planning to do so. It’s thus evident that coal will continue to be used for electricity generation through the foreseeable future despite the increasingly stringent emission control regulations.
Keeping these factors in mind, let us concentrate on two coal stocks that are scheduled to release earnings this week.
Alliance Resource Partners LP (ARLP - Free Report) is expected to report third-quarter 2016 earnings before the market opens on Oct 28. It has reported a positive earnings surprise of 50.00% last quarter. The partnership currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alliance Resource Partners’ Earnings ESP, which represents the difference between the Most Accurate estimate of 84 cents and the Zacks Consensus Estimate of 80 cents, is +5.00%. According to our proven model, stocks with the combination of a Zacks Rank #1, #2 (Buy) or #3 (Hold) and a positive ESP are likely to beat estimates. (Read more: Alliance Resource Q3 Earnings: Will the Stock Beat?)
Cloud Peak Energy Inc. also sports a Zacks Rank #1. The company is set to report third-quarter 2016 results on Oct 27, after the closing bell. Last quarter, it has posted a positive earnings surprise of 237.14%.
Cloud Peak Energy’s Earnings ESP is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 12 cents. (Read more: What's Ahead for Cloud Peak Energy in Q3 Earnings?)
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
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Coal Stocks Queued up to Report Q3 Earnings: CLD and ARLP
The Q3 earnings season is picking up pace and we have seen earnings releases by 116 S&P 500 members so far. Reported earnings were up 3.3% year over year on 1.8% higher revenues. This will probably be one of the busiest weeks of this earnings season, with 810 companies (including 171 S&P members) lining up to release financial results.
For the remaining index members, projections are of a 0.1% improvement in earnings on 1.5% higher revenues despite the expectations of a 72.6% plunge in earnings on 12.2% deterioration in revenues for the energy space. Notably, this could be the first quarter to record positive earnings growth after five quarters of back-to-back declines.
Seven out of the 16 sectors in the Zacks coverage universe are expected to witness earnings decline this season. Read more details in our weekly Earnings Preview report.
Let’s focus on the coal industry, which is currently facing stiff competition from natural gas and alternate sources of energy. The fossil fuel is also grappling with challenges posed by the new emission standards that are compelling utilities to reduce dependence on coal for power generation. As a result, production and consumption of coal in the U.S. has been witnessing a steady decline.
But all hope is not lost for this space as a projected upside in natural gas prices will lead to higher coal burn in 2017. Per an EIA report for the Jan 2015–Apr 2016 period, nearly 87 GW of coal-fired plants have installed pollution control equipment to comply with the new emission standards, while many others are planning to do so. It’s thus evident that coal will continue to be used for electricity generation through the foreseeable future despite the increasingly stringent emission control regulations.
Coal Industry Price Index
Coal Industry Price Index
Keeping these factors in mind, let us concentrate on two coal stocks that are scheduled to release earnings this week.
Alliance Resource Partners LP (ARLP - Free Report) is expected to report third-quarter 2016 earnings before the market opens on Oct 28. It has reported a positive earnings surprise of 50.00% last quarter. The partnership currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alliance Resource Partners’ Earnings ESP, which represents the difference between the Most Accurate estimate of 84 cents and the Zacks Consensus Estimate of 80 cents, is +5.00%. According to our proven model, stocks with the combination of a Zacks Rank #1, #2 (Buy) or #3 (Hold) and a positive ESP are likely to beat estimates. (Read more: Alliance Resource Q3 Earnings: Will the Stock Beat?)
ALLIANCE RES Price and EPS Surprise
ALLIANCE RES Price and EPS Surprise | ALLIANCE RES Quote
Cloud Peak Energy Inc. also sports a Zacks Rank #1. The company is set to report third-quarter 2016 results on Oct 27, after the closing bell. Last quarter, it has posted a positive earnings surprise of 237.14%.
Cloud Peak Energy’s Earnings ESP is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 12 cents. (Read more: What's Ahead for Cloud Peak Energy in Q3 Earnings?)
CLOUD PEAK EGY Price and EPS Surprise
CLOUD PEAK EGY Price and EPS Surprise | CLOUD PEAK EGY Quote
Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks' Best Investment Ideas for Long-Term Profit
Today you can gain access to long-term trades with double and triple-digit profit potential rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>