Alpha Earnings Climb

The coal company offers solid guidance but its stock slips.
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The

Alpha Natural Resources

(ANR)

said fourth-quarter earnings rose more than tenfold from a year ago, helped by an increase in coal production and higher prices.

The Abingdon, Va., company earned $12.4 million, or 20 cents a share, in the quarter, compared with $1.1 million, or 8 cents a share, a year ago. Results include after-tax charge of $3.3 million, or 5 cents a share, related to the company's IPO and related restructuring. On an adjusted basis, the company earned $12.1 million, or 19 cents a share, in the most recent quarter, compared with $1.9 million, or 4 cents a share, a year ago. Analysts surveyed by Thomson First Call were expecting earnings of $14.9 million, or 13 cents a share, in the most recent quarter.

Fourth-quarter revenue rose 52.2% from a year ago to $499.8 million. Analysts were expecting revenue of $376.5 million in the most recent quarter.

The company estimates earnings of $96 million to $123 million, or $1.50 a share to $1.91 a share, including about $13.4 million of remaining non-cash stock-based compensation on coal sales revenue of $1.6 billion to $1.7 billion. Analysts are expecting earnings of $110.1 million, or $1.76 a share, on revenue of $1.8 billion.

"Alpha's solid performance in 2005 has set the bar for us as a new public company, and we're confident moving forward," the company said. "Alpha has established a competitive presence with its high quality reserve base, proprietary coal blending expertise, and leading market share position in both the international and domestic metallurgical coal markets."

The company's operating income rose to $26.3 million, compared with $6.1 million, a year ago. Operating margin increased 340 basis points to 5.2%, compared with 1.8% a year ago.

Fourth-quarter overall average price per ton of coal rose 25% from a year ago to $55.6. Metallurgical and steam coal prices rose 22% and 27%, from the year-ago period.

Results for the most recent quarter include about two month's contribution from the Nicewonder acquisition that the company completed in October 2005. These assets have been integrated into a new business unit, Callaway Natural Resources.

On Monday, the Alpha fell 49 cents to $20.61.

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