* Adjusted loss $0.61/share vs est. $0.77
* Revenue falls 25 percent to $1.20 bln
* Cuts 2013 capital budget to $260 mln-$290 mln from $275
* Shares up 4 percent
Oct 31 Alpha Natural Resources Inc
joined rival Arch Coal Inc in forecasting lower mining
costs for the year as it reins in spending to cope with weak
Alpha Natural's shares rose 4 percent in premarket trading
after the company reported a smaller-than-expected quarterly
loss and cut its capital budget for 2013.
U.S. coal miners are aggressively cutting costs to weather a
weak market. Thermal coal prices have fallen as power producers
are switching to natural gas, while excess supply and weak
demand from China has weighed on prices of steel-making coal.
Alpha Natural, which mines both thermal and metallurgical
coal, cut its 2013 expenditure target to $260 million-$290
million from $275 million-$325 million.
The company set a budget of $250 million-$350 million for
2014 and outlined more cost reductions.
Arch Coal on Tuesday lowered its outlook for capital
spending as well as its cash cost per ton for both its Powder
River Basin and Appalachian operations.
Peabody Energy Corp, the No.1 U.S. coal miner, cut
the top end of its capex for the year earlier this month.
Alpha, which has mines in Virginia, West Virginia, Kentucky,
Pennsylvania and Wyoming, said it now expects the Eastern
segment's cost of sales to be between $71 and $73 per ton in
2013, lower than its previous outlook of $72 to $76.
The company expects costs in the region to further dip to
between $64 and $70 per ton in 2014.
Alpha also said it was developing a plan to further reduce
operating and support expenses by at least $200 million annually
in 2014 and beyond.
"We believe investors will be pleased with the continued
cost control and will most be focused on the company's
relatively positive 2014 guidance," Simmons & Co analysts wrote
in a note to clients.
Alpha expects to ship between 79 million tons and 90 million
tons of coal in 2014, compared with the 86 million tons to 91
million tons it plans to ship this year.
But Alpha Natural Chief Executive Kevin Crutchfield is
optimistic about 2014.
"We are encouraged that the metallurgical coal market
appears to be gradually improving from its recent apparent low
point, and domestic thermal coal inventories have trended down,
planting the seeds for healthier market conditions in the
future," Crutchfield said in a statement.
Alpha also said it had made "significant progress" toward
reaching a tentative settlement in a securities class action
brought by Massey stockholders in 2010 that alleged deficiencies
in Massey's disclosures of safety information.
Alpha bought Massey Energy for $7.1 billion in 2011, but
analysts have since called the deal a disappointment as the
value of the companies' combined assets have deteriorated in a
weak coal market.
Alpha's net loss widened to $458 million, or $2.07 per
share, in the third quarter ended Sept. 30 from $46 million, or
21 cents per share, a year earlier.
Adjusted loss was 61 cents per share, lower than the average
analyst estimate of 77 cents, according to Thomson Reuters
Revenue fell 25 percent to $1.20 billion.