Historical Stock Chart
5 Years : From Jul 2012 to Jul 2017
TAKING THE PULSE: Relatively low natural gas prices continue to crimp demand for the thermal coal used in power plants, so mining companies instead are looking to meet robust demand in other parts of the world. U.S. producers have been scrambling to find shipping terminals to access the growing Asian market for the metallurgical coal used in steelmaking, while Appalachian companies stand to benefit from the recent nuclear power plant crisis in Japan, which has at least temporarily boosted European demand amid a broad backlash against nuclear power. The main constraint on shipments could end up being barge and rail capacity rather than access to ports, however, according to an analysis by Dahlman Rose & Co.
Meanwhile, the Obama administration has rattled many coal companies with curbs on Appalachian mountaintop removal permits, citing water pollution, though a government plan to lease lands in Wyoming with an estimated 758 million tons of low-sulfur coal won rare praise from the industry.
COMPANIES TO WATCH:
Massey Energy Co. (MEE) - report expected April 18
Wall Street Expectations: Analysts polled by Thomson Reuters are expecting a profit of 62 cents a share on $916 million in revenue. A year earlier, the company posted earnings of 39 cents on $688.6 million in revenue.
Key Issues: Massey's shares shot up after Alpha Natural Resources Inc. (ANR) offered $7.1 billion in cash and stock for the Appalachian mining company, which still faces problems stemming from an April 2010 mine explosion that killed 29 workers. The Justice Department is conducting a criminal investigation into the accident while federal and state safety officials investigate its cause. Meanwhile, the company swung to an unexpected loss in the fourth quarter on lower margins and charges related to the explosion, which has spurred tougher safety standards that drove up costs.
Peabody Energy Corp. (BTU) - reports April 19
Wall Street Expectations: Analysts polled by Thomson Reuters are expecting a profit of 60 cents a share on $1.73 billion in revenue. A year earlier, the company posted earnings of 50 cents--52 cents on an adjusted basis--on $1.52 billion in revenue.
Key Issues: The largest U.S. coal producer by output has pinned growth hopes on sales to Asia, where supplies keep tightening amid surging demand. The company can tap the regional market from its foothold in Australia, though severe flooding there at the end of last year forced many producers to miss shipments. Peabody has already said the damage to mines and rail links will lower sales and raise costs in the first quarter, but overall results are still projected to rise following recent improvement in operating margins.
Arch Coal Inc. (ACI) - reports April 26
Wall Street Expectations: Analysts polled by Thomson Reuters are expecting a profit of 34 cents a share on $837 million in revenue. A year earlier, the St. Louis-based company posted a penny per-share loss, or a 3-cent profit excluding charges from left-over contracts related to an acquisition, on $711.9 billion in revenue.
Key Issues: Arch posted three quarters of surging profits in 2010 following a year of dismal shipping volume, but problems returned late last year as the company complained of lessened revenue due to poor rail service in the eastern U.S. Lower-than-planned production at its Mountain Laurel mine and the loss of a federal clean-water permit at its Spruce No. 1 mine have also weighed on the company's top line. Arch has invested in export facilities that offer supply lines to Asia, seeking a toehold in markets where demand for coal is still booming. It was one of two contenders vying for Appalachian producer Massey Energy but lost to large metallurgical coal producer Alpha Natural Resources.
Consol Energy Inc. (CNX) - reports April 28
Wall Street Expectations: Analysts polled by Thomson Reuters are expecting a profit of 73 cents a share on $1.39 billion in revenue. A year earlier, the company posted earnings of 54 cents, or 85 cents excluding asset purchase costs and other impacts, on $1.24 billion in revenue.
Key Issues: Profits at the fifth-largest U.S. coal miner by production slid all last year on higher costs, but the company expects to gain from higher metallurgical coal prices in the first quarter after flooding in Australia hit global supplies. Still, Macquarie Group said the producer might benefit more by selling its peripheral steelmaking coal reserves than developing them itself. Consol is also staking much of its future on natural gas, buying exploration and production assets in the gas-rich Marcellus shale formation.
Alpha Natural Resources Inc. (ANR) - report expected May 4
Wall Street Expectations: Analysts polled by Thomson Reuters are expecting a profit of 92 cents a share on $1.07 billion in revenue. A year earlier, the company posted earnings of 12 cents, or 69 cents excluding items such as merger costs and a charge related to the then-enacted federal health-care law, on $922 million in revenue.
Key Issues: Alpha is poised to become the world's third-biggest producer of metallurgical coal once it closes its planned $7.1 billion merger with Massey Energy, right as demand for the material picks up and supplies stretch thin. The company says the deal has received all needed antitrust approvals and should close in the middle of this year. Alpha recently raised its 2011 shipment target for metallurgical coal, even as shipments for last year were on the low end of previous guidance.
(The Thomson Reuters estimates and year-earlier results may not be comparable because of one-time items and other adjustments.)
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com