Earnings: Down for Massey Energy and MeadWestvaco; Up for Dominion and General Dynamics
- July 28, 2010
Many of Virginia’s Fortune 500 companies are reporting earnings this week, and the news is mixed. While one of Virginia’s hottest summers is boosting business for Dominion, a deadly coal mine explosion depresses earnings for Massey Energy.
The tragic accident at Massey Energy’s Upper Big Branch mine in April brought a second-quarter loss of $88.7 million. The Richmond-based company reported that the loss amounts to 88 cents per share for the quarter ending June 30. In the same period a year earlier, the company earned $20.2 million, or 24 cents a share. The results include pretax charges of $128.9 million in incurred costs associated with an explosion in April that killed 29 workers and is now the subject of civil and criminal investigations. The charges include estimates for loss of equipment, investigation costs, workers compensation and other compensation and benefits provided to the families of the Upper Big Branch miners and expected litigation charges.
“This was clearly a difficult quarter for everyone associated with Massey,” CEO Dan Blankenship said in a statement. “The tragedy at Upper Big Branch and the ensuring, contentious investigation overshadowed our day-to-day operations and largely occupied the time and attention of management and many of our members. We continue to grieve the injury and loss of our miners.”
For the first half of 2010, Massey generated coal revenue of $1.26 billion, compared to $1.28 billion in the first half of 2009. During the second quarter, total revenues came in at $810.1 million, compared to $697.6 million in 2009.
The Richmond-based specialty paper and packaging company saw net income drop to $50 million, or 29 cents per share. This compares to a $125 million profit for the same period in 2009, or 72 cents per share. The second quarter included $11 million in after-tax restructuring costs, while the same period in the previous year included after-tax income of $112 million in alternative fuel tax credits that expired at the end of 2009, as well as $25 million in after-tax restructuring charges.
MeadWestvaco (MWV) increased sales 8.4 percent in the second quarter, primarily because of growth in its packaging resources and specialty chemicals business segments. Sales increased to $1.55 billion compared to $1.4 billion in the second quarter 2009.
Profit was way up to $1.7 billion, or $2.98 per share, compared with earnings of of $454 million, or 76 cents per share, for the second quarter of 2009.
The Richmond-based energy company also announced operating earnings of $426 million, or 72 cents per share, compared to earnings of $404 million, or $68 cents per share, for the previous year.
“Our core businesses continued to deliver solid results in the second quarter,” CEO Thomas F. Farrell II said in a statement. “Coupled with the benefit of hot weather in our electric service industry, we are able to report second-quarter operating earnings well above expectations.” The Richmond-based energy company increased its 2010 earnings guidance from $3.25 to $3.40 per share.
Falls Church defense contractor General Dynamics reported a 4.9 percent increase in second-quarter earnings to $648 million and increased its earnings outlook for the year to between $6.60 and $6.65 per share. Revenue remained steady during the quarter at $8.1 billion. The company saw a 12 percent increase in its Information Systems and Technology segment, but a 2.3 percent decrease and 12.2 percent decrease in revenues at its aerospace and combat systems segments. Marine systems segment revenues remained steady.