* 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
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
Cost of coal sold fell 15 percent, while freight and
handling costs fell 26 percent.