* 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 mln-$325 mln
* Shares up 4 percent
Oct 31 (Reuters) - 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 coal prices.
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 I/B/E/S.
Revenue fell 25 percent to $1.20 billion.