Alpha Natural Resources' loss grows
RICHMOND, Va. - Alpha Natural Resources' widening first-quarter loss was not as bad as Wall Street had expected, but ongoing concern about demand for coal drove shares down 7 percent in early trading.
The company, based in Bristol, Va., posted losses of $110.8 million, or 50 cents per share, for the period ended March 31, compared with a year-ago loss of $28.7 million, or 13 cents per share.
Excluding one-time items, it lost 47 cents per share, beating Wall Street expectations for a loss of 58 cents per share, according to FactSet.
Revenue fell 31 percent to $1.33 billion as coal revenues declined about 30 percent to $1.1 billion. Analysts expected revenue of $1.31 billion.
The coal industry has struggled amid continued soft demand that has driven down thermal coal prices, as many utilities turn to cheaper natural gas to produce power. Less construction overseas also has slowed the appetite for metallurgical coal that's used to make steel.
"We see ongoing weakness more or less across the board," CEO Kevin Crutchfield said in a conference call with investors.
Crutchfield said market conditions for domestic thermal coal differ region by region and the market for met coal remains "fairly weak overall."
Alpha said that both total revenue and coal revenues were hurt by lower average realizations for metallurgical and Eastern steam coal, as well as lower steam coal shipment volumes. Metallurgical coal shipments rose to 5.1 million tons from 4.9 million tons a year ago.
Last September the company announced plans to reduce costs, idle mines and curtail production to improve its performance. Its cost of coal sales fell more than 28 percent to $1 billion during the quarter.
Alpha Natural Resources Inc. has more than 160 mines and processing plants in Kentucky, Pennsylvania, Virginia, West Virginia and Wyoming.
The company said it expects to ship between 83 and 93 million tons during 2013, up from its previous outlook of between 81 and 92 million tons it forecast in February.
Its shares fell 54 cents, or about 7 percent, to $6.93 in morning trading.