(RTTNews) - Massey Energy Co. (MEE: News ) said Tuesday after the markets closed that its third quarter profit fell sharply from last year, hurt by a decline in average realized prices on coal shipped and an increase in average cash cost. The company also lowered its coal shipment outlook for the full year 2009.

The Richmond, Virginia-based coal miner reported net income for the third quarter of $16.5 million or $0.19 per share, compared to $51.6 million or $0.61 per share for the year-ago quarter.

On, average, 19 analysts polled by Thomson Reuters expected the company to earn $0.18 per share for the third quarter.

Total revenue for the third quarter fell 16% to $641.6 million from $763.3 million in the same quarter last year. Nine analysts had a consensus revenue estimate of $676.87 million for the third quarter.

Produced coal revenue for the quarter dropped 20% to $535.5 million from $666.4 million a year earlier.

Massey said it sold 8.7 million tons of coal in the third quarter quarter, down from 10.3 million in the third quarter of last year.

Third quarter operating cash margin per ton was $11.98, down from the near-record high operating cash margin per ton of $16.10 reported in the prior year third quarter.

Average realized prices on coal shipped declined by 4%, as utility coal shipments accounted for 70% of the total tons shipped in the third quarter, up from 65% a year ago, while higher priced metallurgical coal tons accounted for 22% of total tons in the third quarter compared to more than 24% in the third quarter of last year.

Average cash cost per ton for the third quarter increased to $49.81 from $48.49 in the year-ago quarter.
For the first nine months, the company reported net income of $80.1 million or $0.94 per share, compared to $0.02 million or $0.00 per share for the same period last year.

Total revenue for the nine-month period fell to $1.82 billion from $1.92 billion in the prior year period.

The company noted that coal contracting and shipment activities remained slow and coal stockpiles increased during the third quarter, as total electric power generation declined and switching to natural gas fired generation continued.

However, increasing steel production in China, restart of many idled blast furnaces worldwide and rising natural gas prices are some recent positive indicators for market improvement, the company said.

Massey has been reducing costs through the idling of higher cost mines, limitation of overtime, selective general and administrative cost reductions, renegotiation of supply contracts and significant wage and benefit reductions. The company has cut about 700 jobs this year.

To receive FREE breaking news email alerts for Massey Energy Co and others in your portfolio

 1   2   Next Page