Dahlman Rose Comments On International Coal Group Following Earnings

International Coal Group ICE introduced 2011 adjusted EBITDA guidance of $270-310MM, below Dahlman Rose's $321MM forecast and the consensus range of $321-350MM. It believes this is aconservative estimate and continue to favor ICO shares. ICO introduced 2011 adjusted EBITDA guidance of $270-310MM, below Dahlman's $321MM forecast and the consensus range of $321-350MM. Tonnage and realized price guidance were roughly in line with expectations, and Dahlman attributes the EBITDA variance to weaker contracting activity as well as lower prices for open tonnage expected by the company. However, it feels the company may be being conservative ahead of its sale of approximately 2.5MM tons of thermal and 1.0MM tons of met open tonnage for the remainder of this year. While 2011 guidance was disappointing, Dahlman feels management may be erring on the conservative side here and look for growing met sales volumes and improving prices to be a catalyst for the company going forward. Dahlman is updating its adjusted EBITDA estimates to $308MM and $456MM for 2011 and 2012, respectively, from $321MM and $469MM previously. Dahlman Rose has a $12 PT and Buy rating on ICE ICE is trading higher at $125.64