It's been a generally positive day for ASX shares and the share market so far this Friday. At the present time, the S&P/ASX 200 Index (ASX: XJO) has recorded a small but solid gain of 0.34%, putting the index at just under 7,500 points. But it's been an entirely different story when it comes to the Whitehaven Coal Ltd (ASX: WHC) share price.
Whitehaven Coal shares are having a shocker, no way around it. The ASX 200 energy share has plunged by a nasty 5.92% at the time of writing, down to $8.50 a share. That comes after Whitehaven closed at $9.04 a share on Wednesday and opened at $8.77 this morning.
So what's up with Whitehaven that could explain this sizeable drop?
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Why is the Whitehaven share price getting a whipping today?
Well, it's not entirely clear, unfortunately. There's been no fresh news out of Whitehaven today. Or indeed since the company posted its latest quarterly update back on 20 January.
This update was received positively at the time. Whitehaven announced that the three months to 31 December yielded a 21% increase in production against the previous quarter, as well as a 16% lift in sales.
Management is now expecting to rake in earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.6 billion for the current half. That would be a massive increase over the $600 million in EBITDA that Whitehaven delivered in the prior corresponding period.
When these earnings were released, Whitehaven shares shot up more than 6% at the time. But the company has been trending lower ever since, a trend which is obviously continuing today.
Perhaps investors feel like they got ahead of themselves with these results. After all, Whitehaven shares, even after falling more than 10% since 20 January, are still up more than 220% over the past 12 months. With gains like these, it becomes very tempting for investors to take profits off the table.
Trouble in the coal mine?
But perhaps investors have also been spooked by Whitehaven's fellow ASX 200 coal share Coronado Global Resources Inc (ASX: CRN)
Coronado posted quarterly earnings of its own back on Tuesday of this week. While Coronado also posted some impressive numbers, investors seemed spooked by the company's mining costs surging 34.5% over the quarter, largely a consequence of wet weather, maintenance and inflation.
Perhaps this is getting Whitehaven's investors worried as well.
Whatever the reason for Whitehaven's big drop today, longer-term investors would still be way ahead with this coal mining giant.
At the current Whitehaven Coal share price, this ASX 200 energy share has a market capitalisation of $3.42 billion, with a trailing dividend yield of 11.3%.
