Coal producer Alpha Natural Resources (ANR) reported a loss of 50 cents per share for the fourth quarter of 2014, narrower than the Zacks Consensus Estimate of a loss of 68 cents and the year-ago loss of 52 cents.
GAAP loss during the quarter was 55 cents per share compared with a loss of $1.62 per share incurred in the year-ago quarter. The difference between GAAP and operating loss in the reporting quarter was primarily due to impairments, merger related expenses and amortization of acquired assets.
The company’s 2014 operating loss was $1.51 per share, narrower than the Zacks Consensus Estimate of a loss of $2.57 and the 2013 loss of $2.15 per share.
Total Revenue
Alpha Natural Resources’ total revenues of $1,070.6 million in the fourth quarter were ahead of the Zacks Consensus Estimate of $995 million by 7.6%. However, total revenues were marginally lower than the year-ago figure of $1,093.7 million by 2.1%.
Alpha Natural Resources’ total revenues of $4.28 billion in 2014 were ahead of the Zacks Consensus Estimate of $4.22 billion by 1.5%. However, the top line was lower than the 2013 figure of $4.95 billion by 13.4%.
In 2014, the company registered a 13.8% decline in Freight and Handling revenues, while Coal revenues decreased 12.5% and Other Revenues plunged 40.6%, resulting in the overall decline.
Highlights of the Release
Coal tons sold in 2014 decreased 2.7% to 84.6 million tons. The company also witnessed a 10% year-over-year decline in average realized price per ton sold to $44.05. The combination of these two factors impacted the top line of the company.
Total costs and expenses in 2014 were $5.2 billion, down 13.6% from $6.02 billion in 2013.
Financial Update
Cash and cash equivalents as of Dec 31, 2014 were $0.74 billion compared with $0.62 billion as of Dec 31, 2013.
Long-term debt as of Dec 31, 2014 was $3.7 billion, up from $3.4 billion as of Dec 31, 2013.
Cash from (used in) operating activities during 2014 was ($0.28) billion versus $0.10 billion in the prior year. Capital expenditure in 2014 was $0.18 billion compared with $0.21 billion in 2013.
During the year, the company repurchased shares worth $1.4 million, on par with 2013 share repurchases.
Guidance
The company expects to ship 69 to 80 million tons of coal in 2015, which will include 14 to 17 million tons of Eastern metallurgical coal, 19 to 23 million tons of Eastern steam coal, and 36 to 40 million tons of Western steam coal out of the PRB.
Selling, general and administrative expenses are expected to range from $100 million to $120 million for 2015. Interest expense and depreciation, depletion and amortization expense are anticipated in the range of $290 million to $310 million and $650 million to $750 million, respectively.
Capital expenditure for 2015 is expected to be in a range of $225 million to $275 million.
Other Company Release
Arch Coal Inc. (ACI) reported fourth-quarter 2014 pro forma loss of $1.09 per share, wider than the Zacks Consensus Estimate of a loss of 38 cents.
Peabody Energy Corp. (BTU) reported a loss of $1.21 per share in the fourth-quarter 2014, much wider than the Zacks Consensus Estimate of a loss of 36 cents.
CONSOL Energy (CNX) reported pro forma earnings of 25 cents per share for the fourth quarter of 2014, beating the Zacks Consensus Estimate of 20 cents by 25%.
Our View
Alpha Natural Resources was affected by the softness in coal demand and the decline in realized prices per ton made matters worse. The company does not expect a dramatic change in the coal market in 2015 and its shipment volume is expected to further decline from 2014 levels.
To cope with the challenging coal market conditions, the company has decided to idle a few mines in its West Virginia operations.
Alpha Natural Resources currently has a Zacks Rank #3 (Hold).
(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)
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