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International Coal Group says it lost $16 million in 3 months


International Coal Group, which has coal holdings in Letc her County, has warned investors to brace for a non-cash $110 million after-tax charge atop the fourth-quarter and full year 2007 losses it has already reported.

The Scott Depot company said it lost $16 million, or 11 cents per share, in the three months ended Dec. 31. The company lost $97,000, or broke even per share, in the same period of 2006.

Fourth-quarter revenue dipped to $205.6 million, compared with $226.7 million in the same period of 2006.

Wall Street analysts surveyed by Thomson Financial were expecting a loss of 7 cents per share in the quarter.

Just how big a loss ICG will report ultimately – the company labeled its quarterly and annual results preliminary – is uncertain because of the charge. It is not reflected in the quarterly or annual financial results released Feb. 7, ICG said.

The charge reflects the writedown in the value of goodwill – the premium paid above actual value – for operations at four of six subsidiaries, ICG said.

“We felt it was important to the investment community to release our preliminary results,” Chief Executive Ben Hatfield told Wall Street analysts during a conference call.

ICG blamed production shortfalls at three mines, regulatory delays and increased costs for the poor fourth-quarter showing.

Coal sales totaled 18.3 million tons in 2007, compared with 19.4 million tons in 2006, ICG said.

The company said it expects to sell between 19.5 million and 20.5 million tons in 2008. In 2009, ICG expects to sell between 20 million and 21 million tons.

For the full year, ICG said it lost $35.6 million, or 23 cents per share, on revenue of $849.8 million. ICG lost $9.3 million, or 6 cents per share on revenue of $891.6 million in 2006.

Hatfield said ICG is poised for a better 2008 as new mines in West Virginia and Kentucky increase production.

“Our rampup is particular well timed,” Hatfield said. The weak U.S. dollar and other factors have created strong demand for Appalachian coal, particularly for metallurgical quality coal used to make coke for manufacturing steel.

ICG said it has sold 1.4 million tons of metallurgical coal from its Beckley Complex at prices averaging close to $90 a ton. ICG expects its average price this year to range from $47 to $48 per ton.

ICG controls approximately 958 million tons of coal reserves and operates mining complexes in West Virginia, Kentucky, Maryland, Virginia and Illinois.

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