Alpha Natural Resources
) reported a loss of 47 cents per share for the first quarter of
2013, narrower than the Zacks Consensus Estimate of a loss of 58
cents. The loss per share in the quarter was however wider than
the year-ago loss of 27 cents.
GAAP loss during the quarter was 50 cents per share versus a loss
of 13 cents per share incurred in the year-ago quarter. The
difference between GAAP and operating loss in the reporting
quarter was primarily due to impairments and restructuring
Alpha Natural Resources' total revenue of $1.33 billion in the
first quarter was marginally lower than the Zacks Consensus
Estimate of $1.34 billion. The results were also lower than the
year-ago figure of $1.93 billion by 31.6%.
The decline in revenue was primarily due to lower average
realizations for metallurgical and Eastern steam coal and lower
steam coal shipment volumes.
Highlights of the Release
Coal shipment in the first quarter 2013 increased to 5.1 million
tons from 4.9 million tons in the prior-year quarter.
However this did not have a positive impact on total revenue as
the average per-ton realization of $103.28 in the reported
quarter was down 29% from prior-year quarter
Total cost and expenses in first quarter 2013 were $1.5 billion
versus $2.0 billion in the prior-year quarter.
Cash and cash equivalents of the company as of Mar 31, 2012 were
$610.4 million versus $730.7 million as of Dec 31, 2012.
Long-term debt as of Mar 31, 2013 was $3.27 billion decreasing
marginally from $3.29 billion as of Dec 31, 2012.
Cash from operating activities in the first quarter 2013 was
$65.4 million versus $166.7 million in the prior-year quarter.
The company expects to ship 83 to 93 million tons of coal in
2013, which will include 19 to 22 million tons of Eastern
metallurgical coal, 27 to 31 million tons of Eastern steam coal,
and 37 to 40 million tons of Western steam coal out of the PRB.
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Selling, general and administrative expenses are expected to
range from $140 million to $160 million for 2013. Interest
expense and depreciation, depletion and amortization expense are
forecast in the respective range of $230 million to $240 million
and $875 million to $975 million.
Capital expenditure for 2013 is expected to remain in a range of
$300 million to $350 million.
Other Company Releases
Peabody Energy Corporation
) reported an operating loss of 5 cents per share in the first
quarter, narrower than the Zacks Consensus Estimate of a pro
forma loss of 14 cents per share.
Arch Coal Inc
) reported first-quarter 2013 pro forma loss of 34 cents per
share, marginally wider than the Zacks Consensus Estimate of a
loss of 32 cents.
Walter Energy Inc
) reported operating loss per share in the first quarter of 2013
of 64 cents, much narrower than the Zacks Consensus Estimate of a
loss of 88 cents.
The U.S. coal producers continue to feel the brunt of soft
demand, not helped either by the lower realized price of coal.
This has put margins under severe stress. A likely recovery in
the demand for steel in 2013 might act as a catalyst for coal
shipments for companies like Alpha Natural Resources.
Chinese steel production is expected to grow 4% to 5% in 2013,
which might aid coal shipments. The reduction in U.S. coal
inventories to 174 million tons at the end of Mar 2013, from the
peak 2012 level of 214 million tons also indicates a gradual
recovery in coal demand in the domestic markets.
These are signs indicating a possible revival in the coal market
but that is not going to happen soon. Alpha Natural Resources has
been working to align its business to meet market challenges
through cutting down operating costs and investing in the quality
of its operations.
Based in Abingdon, Va., Alpha Natural Resources Inc was founded
in 2002. The company with its subsidiaries engages in the
production and selling of steam and metallurgical coal in the
United States. With a market cap of $1.65 billion the
company has 12,400 full time employees. Alpha Natural Resources
has a Zacks Rank #3 (Hold).