Alpha Natural Resources Q2 Loss Widens - Quick Facts

(RTTNews) - Alpha Natural Resources Inc. (ANR) reported that its second quarter 2014 net loss widened to $513 million or $2.32 per share, from $186 million or $0.84 per share in the second quarter of 2013. The latest-quarter result included a $309 million non-cash goodwill impairment charge.

Excluding the items, adjusted net loss was $123 million or $0.56 per share compared with adjusted net loss of $121 million or $0.55 per share in the second quarter of 2013.

Total revenues in the second quarter of 2014 were $1.05 billion compared with $1.34 billion in the second quarter of 2013, and coal revenues were $0.9 billion, down from $1.1 billion in the year-ago period. The decreases in total revenues and coal revenues were primarily attributable to lower average realizations and lower shipments of metallurgical and PRB steam coal.

Analysts polled by Thomson Reuters expected the company to report a loss of $0.74 per share and revenues of $1.03 billion for the quarter. Analysts' estimates typically exclude special items.

While in the first quarter the Company exhibited some optimism with respect to a potential bottom in metallurgical coal prices and anticipated the potential for improvements in the second half of 2014 and into 2015, prices remain sluggish and Alpha said it does not anticipate any imminent catalyst to support more favorable pricing conditions in the near term. In addition to metallurgical coal weakness, thermal pricing improvement has not materialized as conventional wisdom suggested previously.

Alpha noted that it will continue to evaluate its company-wide cost structure as well as assess the condition of the end markets around the globe. Also, Alpha has made the difficult decision to take further proactive steps to optimize production in the face of weak demand for thermal and met coals and continued regulatory challenges.

On July 31, the Company announced that its affiliates sent Worker Adjustment and Retraining Notification (WARN) notices to approximately 1,100 employees in Central Appalachia (CAPP).

Furthermore, as a result of the combination of weak market conditions and uncertain geology, the decision has been made to operate the Emerald longwall mine only through the second panel in district D, meaning that it will likely cease production in the second half of 2015. While this decision is expected to reduce the Company's Pittsburgh seam longwall volumes after 2015, Alpha is pursuing initiatives at the Cumberland mine to increase volumes and broaden market exposure which should make up some of the margin loss from the higher cost Emerald longwall mine.

The company maintained its 2014 shipments guidance for Eastern metallurgical and Eastern steam coals while lowering its PRB guidance to a range of 34 to 37 million tons primarily due to poor rail performance in the West.