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Alpha's profits triple
By TIM HUBER AP Business Writer
CHARLESTON, W.Va.
Shares of Alpha Natural Resources shot up 12 percent this week after the mine operator said its first-quarter profit more than tripled on soaring international coal prices.
Alpha, parent company of Enterprise Mining in Letcher County, said it earned $25.5 million, or 39 cents per share, in the three months that ended March 31. Alpha earned $8.3 million, or 13 cents per share, in first-quarter 2007. Alpha recorded a $10.9 million, or 17 cents per share, after-tax unrealized gain from adjusting the price of forward coal contracts in first quarter 2008.
Revenue rose 20 percent to $516.9 million, from $430.6 million in first-quarter 2007.
Analysts polled by Thomson Financial expected 17 cents per share on revenue of $487.8 million.
"It was a pretty remarkable start to the year," Chief Executive Mike Quillen told analysts during a conference call.
Alpha, which also operates mines in West Virginia, Virginia, and Pennsylvania, capitalized on coal prices that have more than doubled from a year ago due to strong demand for exports to Europe and South America. Alpha said revenue per ton increased 13 percent to $65.04 in the quarter, compared with $57.36 last year. Revenue per ton of metallurgical-grade coal used to make steel jumped 17 percent to $85.05, from $72.70 in firstquarter 2007.
Production of metallurgical coal increased 22 percent to 2.88 million tons from 2.36 million tons in first-quarter 2007.
The results prompted Abingdon, Va.-based Alpha to raise its 2008 production and price targets. Alpha now expects to produce 24.5 million to 25.5 million tons of coal, up from 24 million to 25 million. It also expects to realize between $70 and $71 a ton, up from a range of $62 to $63 a ton.
Quillen hinted that the rest of the year is shaping up to be strong as well. So far in the second quarter, Alpha has sold 750,000 tons at $240 to $250 a ton.
"We see no letup in demand," Quillen said.
Its stock rose $5.81, or 12 percent, to $56.34 on Monday.
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