Tuesday, Coal producer Alpha Natural Resources Inc. (ANR), reported a loss for the third quarter compared with a profit last year, as higher expenses more than offset the boost in revenues for the period. Looking forward, the company increased its shipment guidance for metallurgical coal by a million tons for 2010 due to improving market environment.
Third-quarter net loss was $19.5 million or $0.19 per share, compared with net income of $67.4 million or $0.93 per share in the same quarter last year for the Abingdon, Virginia-based company.
Loss from continuing operations for the period was $20.0 million or $0.19 per share, compared with income of $66.1 million or $0.91 per share last year.
The results include charges and gains from the acquisition of Foundation Coal Holdings Inc., completed on July 31, 2009. Excluding these merger-related expenses and unusual items, adjusted income from continuing operations increased to $49.4 million from $48.5 million in the prior-year. However, a 32 million increase in share count pushed the per share adjusted net income down to $0.47 from $0.67 reported last year.
On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.38 per share for the quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter were higher at $729.2 million, compared with $688.4 million last year. Analysts expected the company to report revenue of $727.89 million.
The surge in revenues were led by an increase in coal revenues to $662.4 million from $601.5 million, fueled by the inclusion of Foundation operations that added $277.9 million, partially off-set by lower thermal coal shipment levels on reduced demand.
Third quarter revenues were also negatively impacted by lower metallurgical coal shipments, which declined 0.9 million tons for Alpha stand-alone from the year ago period, hurt further by unfavorable prices.
Total costs and expenses for the most recent quarter, however, came in ahead of the revenue by increasing to $748.1 million versus $606.7 million for Alpha stand-alone in the last year, including the $42.4 million of pre-tax merger-related expenses. The company, therefore, reversed to a loss of $18.82 million from operations versus an income of $81.72 million.
Total other expenses were also higher at $47.32 million, compared with $6.5 million year-ago, offset by an income tax benefit of $46.17 million compared with an expense of $9.06 million for the same period of 2008.
For the first nine months of the year, Alpha reported net income of $36.82 million or $0.45 per share versus $160.09 million or $2.29 per share in the prior-year. Adjusted net income from continuing operations was $115.81 million or $1.41 per share, compared with $140.19 million or $2.01 per share reported for the same period last year. Total revenues for the period were $1.6 billion, including $1.4 billion in coal revenues, compared to $1.9 billion with coal revenues of $1.6 billion reported last year.
Looking ahead, Alpha Natural increased its 2010 shipment guidance for metallurgical coal from a range of 9-11 million tons to a range of 10-12 million tons, "based on strengthening metallurgical coal fundamentals and recent customer activity". Also, the company anticipates an increase in realizations for the produce, citing a favorable current market environment.
ANR gained $1.95 or 5.69% in Morning trade, and is currently at $36.24 on 1.71 million shares on the New York Stock Exchange.
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