(By Salman) Alpha Natural Resources Inc. (NYSE: ANR) is scheduled to release
fiscal fourth-quarter 2009 earnings before the market open on Tuesday,
February 9, 2010. Analysts, on average, expect the company to report
earnings of 45 cents a share on revenue of $815.08 million. In the year
ago quarter, the company reported earnings of 28 cents per share on
revenue of $593.84 million.
Alpha Natural
Resources, Inc. operates as a coal producer primarily in the central
Appalachian and northern Appalachian regions. It engages in underground
room and pillar mining, and surface mining operations, with a focus on
high bituminous, low sulfur steam coal and metallurgical coal reserves.
The company produces, processes, and sells steam and metallurgical coal
from 8 regional business units supported by 33 active underground
mines, 24 active surface mines, and 11 preparation plants located
throughout Virginia, West Virginia, Kentucky, and Pennsylvania.
In
the preceding second quarter, the Abingdon, Virgina-based company
posted a loss compared with a profit last year, as higher expenses more
than offset the boost in revenues for the period. Net loss totaled
$19.5 million or $0.19 per share, compared with net income of $67.4
million or $0.93 per share, in the prior-year quarter. On an adjusted
basis, income from continuing operations increased to $49.4 million
from $48.5 million in the prior-year. However, a 32 million increase in
share count pushed the per share adjusted net income down to $0.47 from
$0.67 reported last year. Revenue rose to $729.2 million from $688.4
million last year. Analysts, on average, expected the company to earn
$0.38 per share on revenue of $727.89 million.
In
November, the coal producer lifted shipment citing "strengthening
metallurgical coal fundamentals and recent customer activity." For full
year 2010, Alpha Natural expects metallurgical coal shipment in the
range of 9 to 11 million tons. Previously, the company expected
shipment in the range of 10 to 12 million tons. Also, the company
anticipates an increase in realizations for the produce, citing a
favorable current market environment.
During
the fourth quarter, cash prices for coal on the Big Sandy River, a
benchmark for supplies in the Eastern U.S averaged $54.85 per ton, down
30 percent from the $78.65 a year ago. According to the latest data
from the U.S. Energy Department, consumer coal stocks reached 207.1
million tons as of Sept. 30, due to the mild summer and lower
industrial usage. The department estimates that demand for coal to
generate electricity slumped 10 percent in 2009 and consumption for
steel plummeted 30 percent.
The company is likely to benefit from global economic rebound and revival in industrial activity.
Among
other events during the quarter, Emerald Coal Resources, LP, a unit of
Alpha Natural Resources, Inc., announced that it had resumed production
at the Emerald longwall mine near Waynesburg, Pennsylvania. The Emerald
mine experienced a roof fall on November 18.
The
company's stock currently trades at a forward P/E (fye 31-Dec-10) of
13.14 and PEG Ratio (5 yr expected) of 1.64. In terms of stock
performance, Alpha Natural shares have gained 163 percent over the past
year.
Disclosure: Author doesn't own any of the stocks discussed here.
