BRIEF-Western Energy says increased support for combination with Savanna Energy
* Western Energy Services Corp. Announces increased support for combination with Savanna Energy Services Corp.
* Second-quarter loss $0.74/shr vs est. 0.79/shr
* Revenue down 21 pct
* Shares up 20 pct
Aug 9 James River Coal Co said the market for power-generating coal was showing signs of a recovery following massive industry-wide cutbacks in production, echoing rival Alpha Natural Resources Inc.
A number of coal companies, including Arch Coal Inc, Consol Energy Inc and Alpha Natural, slashed production as electricity demand fell and many power companies switched to cheaper and clean-burning natural gas. The recent cuts totalled more than 100 million tons, Alpha Natural said on Wednesday.
Patriot Coal Corp became the first victim of the falling demand, filing for bankruptcy protection in July.
"(The recovery in the thermal market) is due to production cutbacks throughout the industry as well as improved demand for both coal and natural gas due to warmer-than-normal temperatures," James River Chief Executive Peter Socha said.
Prices of coal delivered to the power industry is expected to stay flat at $2.41 per million British thermal unit this year, the U.S. Energy Information Administration said in its short-term energy outlook report released on Aug. 7.
Brean Murray, Carret & Co analyst Lucas Pipes said thermal coal inventories were still high.
"It helps that gas prices have moved up from very depressed levels earlier this year and temperatures this summer have been warmer than expected... but is it enough?"
James River, which has diversified into more lucrative steel-making coal, said it was cautious about the market in the short term.
The company said it had reached agreements to ship about 816,000 tons of thermal and met coal at an average price of $114.83 per ton in 2012.
"We estimate that James River is likely fully sold out for 2012 on those numbers," analyst Pipes said.
RESULTS BOOST SHARES
Richmond, Virginia-based James River on Thursday reported a smaller-than-expected quarterly loss, sending it shares up as much as 20 percent.
James River shares, which have lost about two-thirds of their value so far this year, were up 14 percent at $2.55 on the Nasdaq. They earlier rose to $2.68.
Second-quarter net loss was $25.8 million, or 74 cents per share, compared with a net income of $800,000, or 2 cents per share, a year earlier.
Revenue fell 21 percent to $277.4 million.
Analysts had expected a loss of 79 cents per share on revenue of $274.7 million, according to Thomson Reuters I/B/E/S.
Total second-quarter coal shipments were 2,910 tons, down 10 percent from a year ago. Met coal shipments, however, rose 23 percent.
Cost of coal sold fell 15 percent, while freight and handling costs fell 26 percent.
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