James River Coal reports surprise loss
- May 10, 2011
James River Coal reported a surprise loss in the first quarter as revenues fell, costs rose and acquisition costs hurt profit.
The coal producer reported a net loss of $7.6 million, or 28 cents per share, compared with a profit of $23.2 million, or 84 cents per share, during the first quarter of last year. Analysts had predicted a profit of 30 cents per share, according to Yahoo! Finance.
Revenues dropped 10. 8 percent during the quarter to $164.6 million as coal shipments decreased and the price of coal dropped. The cost of coal sold was $64.42 per ton during the quarter, compared to $53.88 during the same period last year. The company also had $4.6 million in acquisition costs.
The company saw a drop in the price of thermal coal, which accounted for most of its business in the first quarter. “We have sold over 1 million tons of 2011 and 2012 thermal coal to the U.S. markets during the past several months,” James River CEO Peter Socha said in a statement. “While pricing still remains below our hope and expectations, it is clear that the inventory overhang is coming down.”
James River completed the acquisition of International Resource Partners LP in April for $475 million. The company produces metallurgical and steam coal from mining operations in southern West Virginia and eastern Kentucky.
“We substantially completed a very large acquisition, we completed three large capital markets transactions, and we continued to implement new and enhanced mining regulations,” Socha said. “While all of these items had a short-term negative impact on our financial results during the quarter, we expect all of them to have a significant positive impact later this year and into 2012.”