Alpha Natural Resources Inc.
) reported a loss of 61 cents per share for the third quarter of
2013, narrower than the Zacks Consensus Estimate of a loss of 76
cents. The loss per share was, however, wider than the year-ago
loss of 16 cents.
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The huge loss reflects lower tons of coal sold and a decline in
the weighted average coal margin per ton.
The company's GAAP loss was $2.07 per share versus a net loss of
21 cents per share a year ago. The variance between pro forma and
GAAP loss was due to asset impairment charges, restructuring
charges and other one-time charges and gains.
Alpha Natural Resources' total revenues of $1,191.1 million in
the third quarter were higher than the Zacks Consensus Estimate
by $3.9 million. However, the results were 27.0% lower than the
The significant year-over-year decline reflects lower average
realizations for metallurgical and steam coal, and lower
shipments of both Eastern and Western steam coal.
Highlights of the Release
In the quarter under review, Alpha Natural Resources' Eastern
metallurgical coal shipment was 5.0 million tons, up 3.6% year
over year. The company's shipment of Powder River Basin ("PRB")
coal slumped 23.7% year over year to 10.1 million tons. Alpha
Natural Resources shipped 6.7 million tons of Eastern steam coal,
down 31.7% year over year.
The average per ton realization on metallurgical coal dropped
27.1% year over year to $94.73.
Alpha Natural Resources' total cost and expenses were $1,738.7
million, up 1.2% year over year.
Cash and cash equivalents of Alpha Natural Resources as of Sep
30, 2013 were $668.1 million versus $730.7 million as of Dec 31,
Long-term debt as of Sep 30, 2013 was $3,344.7 million, up from
$3,291.0 million as of Dec 31, 2012.
Alpha Natural Resources' capital expenditure during the quarter
was $56 million versus $87 million in the prior-year quarter.
In 2013, Alpha Natural Resources expects to ship 86 to 91 million
tons of coal, which will include 20 to 21 million tons of Eastern
metallurgical coal, 28 to 30 million tons of Eastern steam coal,
and 38 to 40 million tons of Western steam coal out of the PRB.
In 2014, the company expects to ship 79 to 90 million tons of
coal, which will include 18 to 22 million tons of Eastern
metallurgical coal, 24 to 28 million tons of Eastern steam coal,
and 37 to 40 million tons of Western steam coal out of the PRB.
Selling, general and administrative expenses are expected to be
in the range of $140 million to $160 million for 2013 and $110
million to $140 million for 2014.
Interest expense is expected to range from $235.0 million to $245
million in 2013 and $240.0 million to $255 million in 2014.
Alpha Natural Resources' full-year 2013 capital expenditure is
expected to be in the band of $260.0 million to $290.0 million
while it is expected to be in the range of $250.0 million to
$350.0 million in 2014.
Other Company Releases
CONSOL Energy Inc.
) reported a loss of 24 cents per share for the third quarter of
2013, widely missing the Zacks Consensus Estimate of earnings of
SunCoke Energy, Inc.
) reported earnings per share of 9 cents beating the Zacks
Consensus Estimate of 7 cents by 28.6%. Earnings however lagged
the year-ago figure by 45 cents.
Arch Coal Inc.
) reported third-quarter 2013 loss of 1 cent per share, much
narrower than the Zacks Consensus Estimate of a loss of 30 cents.
The company had however reported earnings per share of 20 cents
in the prior-year quarter.
Alpha Natural Resources' top and bottom line succeeded in beating
the Zacks Consensus Estimate. However, the company incurred a
much wider loss in the quarter compared to the year-ago period.
Also, revenues declined year over year as a result of lower
average realizations and shipments. The numbers reflect a tough
market environment and an unplanned outage at the company's
However, the company believes that the metallurgical coal market
is gradually improving. Also, the company is planning to reduce
operating and support expenses by at least $200 million annually
in 2014 and beyond. These initiatives will enable the company to
improve its financial position.
Abingdon, Va.-based Alpha Natural Resources Inc. with its
subsidiaries engages in the production and selling of steam and
metallurgical coal in the U.S. The company currently has a Zacks
Rank #3 (Hold).