LINTHICUM HEIGHTS, MD. (
) -- While the profit of its competitors fell victim to coal's slumping demand,
managed to swing to a profit, thanks to some cost-cutting moves and higher prices.
On Monday, Foundation said its total sales dipped slightly in the second quarter, to $404.7 million from $411.9 million in the year-earlier period. Coal revenues, in particular, fell to $399 million from $404.8 million, while coal shipments dropped to 16.4 million tons from 17 million tons. But Foundation was able to offset that by slashing the cost of coal sales by 15% in the quarter and increasing price realizations during the quarter.
Earnings for the company landed at $30.7 million, or 67 cents a share, compared to a loss of $4.4 million, or 10 cents, in the year-earlier period.
The results also included $4.8 million worth of expenses related to
Alpha Natural Resources's
plans to buy Foundation. On Friday, stockholders will vote on Foundation's then-announced $1.4 billion, all-stock sale. If approved, the deal, according to the press release, will produce the third largest coal producer in the U.S., with the transaction likely to close just after the vote.
On average, analysts polled by Thomson Reuters expected the coal supplier to produce earnings at 71 cents a share, along with revenues of $445.2 million. Typically, estimates exclude one-time items.
Alpha said its earnings fell 77%
because of a demand drop fueled by cutbacks in steel and power production.