Stillwater Mining Co. (SWC:US), the only U.S. producer of palladium and platinum, said its second-quarter loss widened as production declined.
The net loss widened to $2.52 million, or 3 cents a share, from $2.34 million, or 3 cents, a year earlier, Billings, Montana-based Stillwater said today in a statement. Sales rose 38 percent to $161 million.
The company, which has two mines stretching more than 28 miles in the Beartooth Mountains of Montana, said production fell 10 percent to 133,100 ounces. Output at the Stillwater mine fell 15 percent, partly because of lower productivity amid labor negotiations. The company reduced its 2007 output estimate to as much as 585,000 ounces from a previous forecast of as much as 645,000 ounces.
``Earnings, particularly when viewed on a quarterly basis, probably will remain volatile for some time yet,'' Chief Executive Officer Francis McAllister said in the statement.
The company increased the average workweek to 42 hours from 35 hours to reduce costs, causing higher-than-normal labor attrition during the quarter, Stillwater said. Productivity also fell as some experienced miners left, the company said.
Shares of Stillwater rose 36 cents, or 4.2 percent, to $8.92 at 4:31 p.m. in New York Stock Exchange composite trading. They have fallen 29 percent this year.
The company sold platinum at $949 an ounce, 13 percent higher than a year earlier. Palladium sold for $386 an ounce, 2.1 percent higher.
Stillwater locked in palladium and platinum prices in forward contracts to General Motors Corp., Ford Motor Co. and Mitsubishi Corp. through 2010.
The metals are used in catalytic converters to control air pollution and also are used in jewelry.
Palladium futures for September delivery fell 45 cents, or 0.1 percent, to $366.60 an ounce today on the New York Mercantile Exchange. The metal averaged $372.33 during the quarter, 6.7 percent higher than a year earlier.
Platinum futures for October delivery rose $1 to $1,299 an ounce. The metal, which reached a record $1,353.80 an ounce on May 7, averaged 8.9 percent higher at $1,299.11 an ounce.
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