LINTHICUM HEIGHTS, Md. (AP) ¿ Mine operator Foundation Coal Holdings Inc. posted a loss for the first quarter as coal shipments fell and costs increased.
The company reported a loss of $4.5 million, or 10 cents a share, compared with a profit of $6.2 million, or 13 cents a share, in the year-earlier period. Cost increases were seen in diesel fuel, repair and maintenance supplies, labor and benefits and coal sales. The latest-quarter results also included $1.1 million in employee termination costs associated with the idling of a mining complex.
Revenue slipped to $405.7 million from $412.3 million a year ago.
Analysts polled by Thomson Reuters expected a smaller loss of 4 cents on revenue of $400.8 million. Their estimates typically exclude one-time losses.The company said economic conditions have cut demand for coal globally. To align demand with production, domestic producers likely will have to cut production by 80 to 100 million tons this year. So far, the reduction is about 60 million, the company said. "Capital investment is being slashed across the energy space; today's low prices will force more production cuts and mine closures, particularly among high-cost mines in Central Appalachia; and utilities will eventually work through their inventories," said Chief Executive James F. Roberts, in a statement. He said when economic pressures ease and demand increased, low-cost coal producers should see a strong resurgence in prices, but short-term challenges likely will persist. Shares rose 43 cents, or 2 percent, to close at $21.10.