SunCoke Energy's Loss Wider than Expected - Analyst Blog

SunCoke Energy, Inc. SXC incurred a first quarter loss of 11 cents per share, much wider than the Zacks Consensus Estimate of a loss of 1 cent per share. In the prior-year quarter, the company had reported earnings of 3 cents per share.

The year-over-year decline was due to the impact of severe winter climate on coke making yields and production along with the Indiana Harbor refurbishment.

Total Revenue

SunCoke Energy's first quarter total revenue was $359.6 million, down 20.8% from $453.9 million a year ago.

The year-over-year decline in revenue was a result of the pass-through of lower coal prices and reduced coke sales volume in its Domestic Coke segment. Another reason was a $22 per ton decline in the average coal sales price, partially offset by higher coal sales volume in its Coal Mining Segment.

Operating Update

Cost of product sold and operating expenses in first quarter 2014 was $304.0 million, down 20.5% from the prior-year period.

However, selling and administrative expenses increased to $21.9 million from $20.6 million a year ago.

Operating income plummeted 82.6% to $4.7 million. Interest expenses declined 23.4% to $12.1 million from $15.8 million a year ago.

Financial Update

Cash and cash equivalents as of Mar 31, 2014 were $178.2 million versus $233.6 million as of Dec 31, 2013.

Long-term debt was $647.9 million as of Mar 31, 2014 compared with $648.1 million as of Dec 31, 2013.

Net cash used in operations was $11.3 million in the reported quarter versus $12.8 million of net cash provided by operating activities in the prior-year period.

Guidance

SunCoke expects its domestic coke production in 2014 to be 4.2 million tons, while coal production is anticipated to hit 1.3 million tons.

Earnings per share for 2014 are expected in the range of 8 cents to 33 cents per share, with adjusted EBITDA ranging between $220–$240 million.

Total capital expenditure in 2014 is expected to be around $138 million.

Other Upcoming Releases

Oxford Resource Partners, L.P. OXF is slated to release its first quarter earnings on May 21. The Zacks Consensus Estimate is currently placed at a loss of 29 cents per share.

Rhino Resource Partners LP RNO is expected to release its first quarter earnings on May 1. The Zacks Consensus Estimate is at 3 cents per share.

Alliance Resource Partners LP ARLP is scheduled to release its first quarter earnings before the market opens on Apr 28. The Zacks Consensus Estimate is pegged at a loss of $1.74 per share.

Zacks Rank

SunCoke Energy currently carries a Zacks Rank #3 (Hold).