* Four eastern Kentucky mines idled, 200 staff on furlough
* Third-quarter liquidity down 35 pct from second quarter
* Adjusted loss $1.41 per share vs est loss $1.22
* Shares fall as much as 17 percent
(Adds CEO and analyst comments, compares with estimates;
Nov 7 James River Coal Co idled four
more mines in Central Appalachia and temporarily laid off about
200 employees as the company looks to shore up its precarious
cash position amid weak coal prices.
The company's shares fell 17 percent to $1.58 after the coal
miner also posted a bigger-than-expected quarterly loss and its
"The balance sheet continues to be the critical issue to
watch for James River Coal," Simmons & Co analyst Bill Herbert
said in a note.
James River Coal's available liquidity plunged 35 percent to
$71 million as of Sept. 30, from $108.8 million as of June 30.
If the liquidity were to fall below $50 million, it would
amount to a covenant breach, according to terms of the company's
"I feel relatively optimistic about where we are right now
but at the same time I also need to be cautionary that a lot of
agreements need to be reached and a lot of negotiating that
still has to take place," Chief Executive Peter Socha said on a
post-earnings conference call.
He said the company was in talks with current debt holders
and also other potential investors.
Tuesday's idling brings to seven the number of James River
Coal mines shut since September, as U.S. coal miners also
struggle with tougher environmental regulations.
James River Coal idled production at three mines in Central
Appalachia in September, and last month said about 525
employees, who were put on furlough, will be laid off in the
fourth quarter. ()
Thermal coal prices have been hit as power companies opt for
cheaper natural gas to generate electricity, while weak steel
demand and excess supplies have weighed on price of steel-making
or metallurgical coal.
James River Coal also has mines in southern West Virginia
and southern Indiana.
The four mines at its Buckeye operations in eastern Kentucky
in Central Appalachia produced about 1 million tons through
September, or about 16 percent of total output during the
Shipments in the third quarter fell 34 percent to 2.1
million tons, while coal prices fell about 18 percent to $68.68
Excluding one-time items, the company posted a loss of $1.41
per share, while analysts expected a loss of $1.22 per share,
according to Thomson Reuters I/B/E/S.
The company's net loss widened to $25.5 million, or 73 cents
per share, from $20.6 million, 59 cents per share, a year
James River Coal's shares recouped some of their losses to
trade down 10 percent at $1.71 by early afternoon. More than 2.3
million shares changed hands by that time, more than double its
The shares have nearly halved in value this year.