Yahoo Finance What to Expect from Westmoreland Coal’s Future Earnings?
How Westmoreland Coal's 2015 Results Compared with Expectations
Westmoreland Coal’s 2016 guidance
Westmoreland Coal (WLB) maintained its 2016 sales guidance in line with the fiscal 2015 sales after factoring in sales from its San Juan Mine acquisition. Considering the estimated production capacity of 5.9 million tons of the San Juan Mine in 2016, 97% of the contracted positions of coal produced and 53.3 million tons of coal sold during fiscal 2015, this guidance can be considered conservative.
Moving ahead, the company expects a decrease in capital expenditures from $70 million–$75 million in 2015 to $59 million–$71 million in 2016.
Westmoreland Coal (WLB) anticipates an increase in free cash flows from $48 million–$52 million in 2015 to $60 million–$80 million in 2016, mainly driven by additional sales from San Juan Mine.
Also, the company anticipates an increase in adjusted EBITDA from $215 million–$225 million in fiscal 2015 to $235 million–$275 million in fiscal 2016 upon the complete integration of San Juan Mine with Westmoreland Coal’s operations.
Analysts’ expectations
After its fiscal 2015 earning results, analysts revised down their future EBITDA estimates of Westmoreland Coal. For the coming quarter, analysts expect a 4% decrease in EBITDA compared to their pre-fiscal 2015 earnings release estimates.
Outlook
Westmoreland Coal (WLB) had an impressive 2015 as far as core operations are concerned. A decrease in revenues from its power generation business and depressed coal pricing at the Coal Valley mine in Canada weighed on its revenues.
In the short term, the integration of San Juan Mine into the Westmoreland operations and maintaining its liquidity position are crucial for Westmoreland Coal. In the long term, the fate of the Clean Power Plan and other environment regulations should decide the future of Westmoreland Coal and other pure-play coal miners like Peabody Energy (BTU), Alpha Natural Resources (ANRZQ), Cloud Peak Energy (CLD), and Arch Coal (ACIIQ).
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