August 6, 2014 / 12:15 PM / 3 years ago

UPDATE 2-Lower selling cost helps Alpha Natural post smaller-than-expected loss

* 2nd-qtr adj loss/shr $0.56 vs est $0.74

* Shares rise as much as 8 pct (Adds estimates, analyst comment, details from statement, background, share move)

Aug 6 (Reuters) - Alpha Natural Resources Inc reported a smaller-than-expected second-quarter loss as the cost of selling coal in eastern United States declined 6 percent from the first quarter.

Alpha Natural shares rose as much as 8 percent in early morning trading on the New York Stock Exchange on Wednesday.

The third-largest coal supplier in the United States said adjusted cost of coal sales for its eastern mines - spanning the Appalachian region in Pennsylvania, West Virginia and Kentucky - fell to $62.01 per ton, from $65.73 in the first quarter.

“This drop alone provided a $45 million tailwind,” said Brean Capital analyst Lucas Pipes.

Alpha Natural said last week that it planned to idle 11 mines in West Virginia and cut up to 1,100 jobs, underscoring the dismal state of the once-iconic Central Appalachian mines.

The 11 mines produced 4.2 million tons of thermal and metallurgical coal in the first half of the year.

U.S. coal miners have been hit by weak metallurgical coal prices, which has forced them to idle mines and cut jobs.

Alpha Natural, and rivals such as Peabody Energy Corp and Arch Coal Inc have also been hurt by poor rail service in Wyoming’s Powder River Basin, preventing them from cashing in on an uptick in demand for electricity-generating coal.

Alpha Natural on Wednesday cut its forecast range for annual shipments from the Powder River Basin by 3 million tons to 34-37 million tons.

The company said while pricing for metallurgical, or steel-making, coal may have bottomed, it does not currently see an imminent catalyst to spur a pricing uptick in the near term.

Alpha Natural’s metallurgical coal shipments fell to 4.5 million tons in the second quarter ended June 30, from 5.6 million tons, a year earlier.

Peabody Energy on Tuesday said it was cutting met coal production from its high-cost Burton Mine in Queensland, Australia.

Alpha Natural’s net loss nearly tripled to $512.6 million, or $2.32 per share, in the second quarter, hurt by a non-cash goodwill impairment charge of about $309 million.

On an adjusted basis, the company posted a loss of 56 cents per share, much smaller than the 74 cents anticipated by analysts on an average, according to Thomson Reuters I/B/E/S.

Alpha Natural shares were up nearly 4 percent at $3.55 on Wednesday morning, after touching a high of $3.69. The stock had more than halved in value this year up to Tuesday’s close. (Reporting by Sayantani Ghosh and Sneha Banerjee in Bangalore; Editing by Joyjeet Das and Kirti Pandey)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below