Alpha Natural Swings To 2Q Loss On Acquisition Expenses

Alpha Natural Resources Inc. (ANR) swung to a second-quarter loss on high acquisition expenses, masking strong metallurgical coal revenue growth.

The company also projected full-year total shipment volumes including the contribution of acquired legacy operations from Massey Energy Co. of 104 million to 112 million tons.

Alpha completed its acquisition of rival Massey in June for $7.1 billion, becoming the world's third-largest producer of metallurgical coal. Alpha inherits extensive reserves of the high-margin coal as well as several lawsuits related to the explosion at Massey's Upper Big Branch mine in West Virginia that killed 29 workers last year.

Alpha posted a loss of $56.4 million, or 36 cents a share, compared with a year-earlier profit of $38.8 million, or 32 cents a share. Excluding items merger-related expenses, write-downs and other items, adjusted earnings from continuing operations were 96 cents. The most recent period included the impact of $254.4 million in merger-related expenses as well as $26 million in additional expenses, partially offset by a $54.1 million income tax benefit. Revenue rose 59% to $1.59 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of $1.08 on revenue of $1.51 billion.

Overall costs rose 72%.

Tons sold from continuing operations rose 14%. Revenue from metallurgical operations doubled to become the company's largest contributor to the top line as sales volume rose 34% and average realized prices rose 50%. Eastern steam revenue rose 31% as sales volume was up 30% and prices edged up 0.8%.

Shares closed at $40.08 Wednesday and were inactive premarket. The stock is down 33% year-to-date.

   -By Nathalie Tadena, Dow Jones Newswires; 212-416-3287;  [e-mail]