November 3, 2009 / 8:00 PM / 8 years ago

UPDATE 2-Coal miner Alpha's profit tops view, stock up

* Q3 EPS ex-items 47 cents; Street view 38 cents

* Revenue falls 41 pct to $729 mln

* Stock rises 6.5 pct (Updates with analyst comment, production data; updates stock move)

NEW YORK, Nov 3 (Reuters) - Coal miner Alpha Natural Resources Inc ANR.N posted better-than-expected quarterly profit on Tuesday and said it expects to sell more steel-making metallurgical coal next year, sending its shares up 6.5 percent.

Chief Executive Kevin Crutchfield said interest in metallurgical coal had picked up markedly in the last few months, “and order flow is beginning to result from this heightened activity.”

As a result of the rise in global steel production, Alpha is increasing its forecast for metallurgical coal shipments in 2010 by one million tons, to a range of 10 million to 12 million tons, he said.

“Alpha showed strong execution in the quarter, and we are incrementally more positive ... as we believe the met (metallurgical) outlook continues to improve, which could have strong earnings implications for 2010.” said analyst Curt Woodworth of Macquarie Securities.

Alpha shares were up $2.22 to $36.52 in afternoon trading on the New York Stock Exchange.

The Abingdon, Virginia-based company reported a net loss of $19.5 million, or 19 cents per share, for the third quarter, compared with profit of $67.4 million, or 93 cents per share, a year earlier.

Excluding expenses related to its acquisition of Foundation Coal and other one-time items, it earned 47 cents a share, topping analysts’ average forecast of 38 cents, according to Thomson Reuters I/B/E/S.

Revenue fell 41 percent to $729 million and average realized prices per ton were down more than 50 percent. Alpha produces steam, or thermal, coal for power generation, and metallurgical, or coking, coal for steelmaking.

Crutchfield said, “We will continue to pursue a pragmatic and restrained approach to production in the current market environment, in which decreased coal-fired generation and high utility inventories have significantly reduced demand for thermal coal.”

During the third quarter, Alpha sold 16.5 million tons of coal, with Foundation’s operations contributing for two months of the quarter.

The average per-ton realization was $40.25, down more than 50 percent from $86.58 in the third quarter of 2008. (Reporting by Matt Daily and Steve James, editing by Dave Zimmerman and John Wallace)

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