Alpha Natural Resources stock up on job cut plans
NEW YORK (AP) — Shares of Alpha Natural Resources continued to rise Friday after the coal producer said it will eliminate about 230 positions to reduce costs.
The job cuts are part of a plan to cut at least $200 million in expenses in 2014. The Bristol, Va., company said it will not fill about 100 vacant positions as part of the move.
Alpha Natural Resources Inc. has mining operations in Virginia, West Virginia, Kentucky, Pennsylvania and Wyoming. On Thursday morning, the company reported its third-quarter loss and took a smaller loss than Wall Street had expected. Alpha Natural Resources lost 61 cents per share if special items like impairment and restructuring costs are excluded. Revenue fell 27 percent to $1.19 billion.
Analysts were anticipating a loss of 76 cents per share on revenue of $1.18 billion, according to FactSet.
The company faced a tough market for coal and the closure of one of its mines during the quarter. Weaker demand has driven down the price for metallurgical coal, which is used in making steel, as well as the price for thermal coal, which has fallen as many utilities shift to lower-priced natural gas. The company said Thursday that the market for metallurgical coal is gradually getting better.
Alpha Natural Resources said it expects to ship 86 million to 91 million tons of coal in 2013 and 79 million to 90 million tons in 2014. The company lowered its 2013 spending target to a range of $260 million to $290 million from its prior forecast of $275 million to $325 million.
Raymond James analyst James Rollyson upgraded the company's shares to "Market Perform" from "Underperform," saying its costs were lower than he expected and the company is continuing to make progress on reducing its expenses.
"Since the peak, Alpha Natural Resources will have nearly cut its selling, general and administrative costs in half, based on next year's guidance," Rollyson said.
Alpha Natural Resources shares gained 39 cents, or 5.6 percent, to $7.39 in afternoon trading. The stock picked up 3.9 percent on Thursday.