Alpha Natural Resources, Inc.
) reported a loss of 59 cents per share for the second quarter of
2013, narrower than the Zacks Consensus Estimate of a loss of 60
cents. The loss per share was, however, wider than the year-ago
loss of 33 cents primarily due to lower tons of coal sold and
decline in weighted average coal margin per ton.
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The company's GAAP loss was 84 cents per share versus earnings of
$10.14 per share a year ago. The variance between pro forma and
GAAP loss was due to the pre-tax impairments and restructuring
Alpha Natural Resources' total revenues of $1,335.1 million in
the second quarter were higher than the Zacks Consensus Estimate
by $91.1 million. However, the results were 27.8% lower than the
year-ago figure primarily due to a drop in steam coal shipment
volumes and a decline in average realizations for metallurgical
and steam coals.
Highlights of the Release
In the quarter under review, Alpha Natural Resources'
metallurgical coal shipment was 5.6 million tons, flat with the
year-ago level. The company's shipment of Powder River Basin
(PRB) coal decreased 13.7% year over year to 8.8 million tons.
Alpha Natural Resources shipped 7.2 million tons of Eastern steam
coal compared with 11.0 million tons a year ago.
The average per ton realization on metallurgical coal decreased
21% year over year to $100.95.
Alpha Natural Resources' total cost and expenses were $1.5
billion, down 66.7% year over year due to a decline in cost of
coal sales, freight and handling expenses and depreciation
expenses, and absence of goodwill impairment.
Cash and cash equivalents of Alpha Natural Resources as of Jun
30, 2013 were $512 million versus $730.7 million as of Dec 31,
Long-term debt as of Jun 30, 2013 was $3.4 billion, down from
$3.3 billion as of Dec 31, 2012.
Net cash from operating activities during first six months of
2013 was $67.5 million versus $135.3 million in the prior-year
Alpha Natural Resources' capital expenditure during the quarter
was $63 million versus $119 million in the prior-year quarter.
The slackness in coal demand has prompted the company to lower
its capital expenditure and stem the speed of its mine
Alpha Natural Resources expects to ship 83 to 91 million tons of
coal in 2013, which will include 19 to 21 million tons of Eastern
metallurgical coal, 27 to 30 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. Interest
expense and depreciation, depletion and amortization expense are
forecast in the range of $235 million to $245 million and $875
million to $950 million, respectively.
Alpha Natural Resources' full-year 2013 capital expenditure is
expected to be in the band of $275 million to $325 million.
Other Company Releases
Arch Coal Inc.
) reported second-quarter loss of 29 cents per share, narrower
than the Zacks Consensus Estimate of a loss of 32 cents.
Cloud Peak Energy Inc.
) reported a loss of 2 cents per share for the second quarter,
widely missing the Zacks Consensus Estimate of earnings of 7
CONSOL Energy Inc.
) reported a loss of 3 cents per share for the second quarter,
widely missing the Zacks Consensus Estimate of earnings of 18
For the last couple of quarters, Alpha Natural Resources'
performance was challenged by prevailing soft demand of coal due
to the continuing economic depression in Europe and slow recovery
of Chinese steel production.
Alpha Natural Resources has undertaken cost cutting initiatives
and has decided to idle uneconomic mines. These initiatives will
enable the company to improve its financial position.
The World Steel Association projects nearly 3% year-over-year
growth in global steel usage in 2013 and 2014, which makes
metallurgical coal producers hopeful of a revival in coal demand.
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).