BRISTOL, Va. (AP) — Alpha Natural Resources Inc. said Thursday that it significantly widened its third-quarter loss due to weaker coal revenue and special charges.
But the loss was smaller than Wall Street had anticipated and the company lowered its mining cost forecasts.
The Bristol, Va., company dealt with a tough market for coal and the closure of one of its mines during the quarter. Weaker demand has driven down the price for metallurgical coal, which is used in making steel, as well as the price for thermal coal, which has fallen as many utilities shift to lower-priced natural gas.
"We are encouraged that the metallurgical coal market appears to be gradually improving from its recent apparent low point, and domestic thermal coal inventories have trended down, planting the seeds for healthier market conditions in the future," CEO Kevin Crutchfield said in a news release.
Alpha Natural Resources posted a loss of $458.2 million, or $2.07 per share, for the quarter that ended Sept. 30. That is compared with a loss of $46.1 million, or 21 cents per share, last year. After adjusting for impairment and restructuring costs, as well as other special items, it lost 61 cents per share versus 55 cents per share. Revenue fell 27 percent to $1.19 billion.
Analysts polled by FactSet were anticipating a loss of 76 cents per share on revenue of $1.18 billion.
Alpha also said Thursday that it has made significant progress toward settling a class action case brought by Massey Energy stockholders alleging deficiencies in Massey's disclosure of safety information. A disaster at Massey's Upper Big Branch mine in 2010 killed 29 coal miners. Alpha bought Massey in 2011. The company expects insurance will cover $70 million of the potentially $265 million settlement.
Alpha Natural Resources did not give a profit forecast but said it expects to ship 86 million to 91 million tons of coal in 2013 and 79 million to 90 million tons in 2014. The company lowered its 2013 expenditure goal to a range of $260 million to $290 million from its prior forecast of $275 million to $325 million.
Alpha has mining operations in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming.