Patriot Beats, Still in the Red – Analyst Blog

Coal producer Patriot Coal Corporation’s (PCX) second quarter loss came in at 15 cents per share, better than the Zacks Consensus Estimate of a loss of 30 cents per share. Last year, the company reported earnings of 39 cents for the corresponding period.

 

 

Revenues rose 6.3% year over year to $539 million, primarily driven by higher average selling prices. Total revenue surpassed the Zacks Consensus Estimate of $525 million. Around $465 million came from Appalachia Mining Operations and the rest came from Illinois Basin Mining Operations.

 

Volume sales in the reported quarter totaled 8.1 million tons (down 2.5% year over year), including 6.2 million tons of thermal and 1.9 million tons of metallurgical coal. Appalachia Mining Operations’ share was 6.4 million tons while Illinois Basin Mining Operations contributed 1.6 million tons.

 

Revenues per ton rose $7.52 per ton to $66.18 per ton from $58.66 last year. Revenues per ton from Appalachia Mining Operations rose to $72.28 from $63.88 in the year-ago quarter. Similarly, Illinois Basin Mining Operations witnessed revenues per ton rising to $42.20 from $39.50 in the year-ago quarter.

 

Operating cost per ton totaled $56.69 in the reported quarter, compared with $52.41 in the year-ago quarter. Operating cost rose mainly due to lower production resulting from regulatory inspections, ventilation adjustments in a number of mines, roof collapses at Harris and Highland complexes and scheduled longwall moves in the Panther and Federal complexes.

 

Patriot Coal reported a net loss of $13.6 million in the reported quarter compared with a net income of $31.4 million in the year-ago period.

 

 

Patriot Coal ended the quarter with cash and cash equivalents of approximately $239.2 million, compared with $27.1 million at the end of fiscal 2009. The company generated $20.8 million of cash for operations in the first half of fiscal 2010, compared with $19.6 million in the year-ago quarter. Long term debt increased to $448.3 million at the end of the first half of fiscal 2010 from $198 million at the end of fiscal 2009.

 

 

Patriot Coal expects its fiscal 2010 sales volume in the range of 32–34 million tons, including metallurgical coal sales of approximately 7.5 million tons.   

 

We are currently Neutral on the Zacks #3 Rank stock.