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Alpha Natural Resources (ANR) 3Q Loss Narrower Than Expected; Shares Rise

 November 02, 2012 09:07 AM

(By Balaseshan) Coal Producer Alpha Natural Resources Inc. (NYSE: ANR) reported a quarterly loss due to lower metallurgical coal revenue. Despite revenue missing consensus, loss was narrower than Street's expectations, sending its shares up 5.87% in premarket.

Loss per share for the third quarter was $0.21, compared to EPS of $0.28 last year. Excluding charges, adjusted loss was $36 million or $0.16 per share, compared to a profit of $76 million or $0.34 per share last year.

Revenue plunged 29.2% to $1.63 billion.

Analysts, on average, polled by Thomson Reuters had expected a loss of $0.45 per share on revenue of $1.68 billion for the third quarter.

[Related -Alpha Natural Resources, Inc. (ANR): Bears Eye Stock Options]

Coal revenues dropped 27.1% to $1.456 billion, primarily due to lower metallurgical coal revenues on a 23% decline in average per ton realizations and a 18% decrease in shipment volumes, as well as a 23% decrease in Eastern steam coal shipment volumes.

Alpha shipped 13.2 million tons of Powder River Basin (PRB) steam coal, 9.8 million tons of Eastern steam coal and 4.9 million tons of metallurgical coal.

Average per ton realization for PRB shipments rose to $12.87 from $11.98, while for Eastern steam coal shipments the average realization per ton declined to $66.0 from $67.07. The average per ton realization for metallurgical coal fell to $129.96 from $168.49.

Looking ahead into the fiscal 2012, Alpha reaffirmed its total shipment volumes guidance of 100-115 million tons, including 20-23 million tons of Eastern metallurgical coal, 38-44 million tons of Eastern steam coal, and 42-48 million tons of Western steam coal.

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Alpha reiterated its 2012 capital expenditures forecast of $450 million to $600 million and its depletion, depreciation and amortization expense outlook of $1.05 billion to $1.15 billion.

"This restructuring, which was announced in September, is a difficult but necessary step, impacting about 1,200 positions and the communities where we operate. We never take such actions lightly, but our goal remains to emerge from the current headwinds in an even stronger position within our industry, which ultimately will benefit all our constituents," said Kevin Crutchfield, Alpha's chairman and CEO.

The restructuring actions began in September and will be phased in through early 2013. Once fully implemented, all of the production cutbacks and restructuring actions are expected to result in a $150 million annual reduction in recurring overhead costs, in addition to other cost of coal sales reductions due to mine idlings and production curtailments.

ANR closed Thursday's regular session up 3.14% at $8.86. The stock has been trading between $5.28 and $29.29 for the past 52 weeks.



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