Alpha Natural Swings to Profit

The coal company's first-quarter revenue rose 54.5%.
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Alpha Natural Resources

(ANR)

said Thursday it swung to a profit in the first quarter, on strong demand and higher coal price.

The Appalachian coal producer earned $27.2 million, or 43 cents a share, in the quarter, compared with a loss of $25.8 million, or 71 cents a share, a year ago. First-quarter earnings include stock-based compensation expense of 6 cents a share. Analysts polled by Thomson First Call were expecting earnings of $27.6 million, or 39 cents a share.

First-quarter revenue rose 54.5% from a year ago period to $482.3 million. Analysts were expecting revenue of $471.6 million in the most recent quarter.

The company expects to earn $96 million to $123 million, or $1.50 to $1.91 a share in full-year 2006, including IPO-related remaining stock-based compensation expense. Coal sales revenue for the year is expected to be $1.6 billion to $1.7 billion. Analysts were expecting earnings of $110.9 million, or $1.80 a share, for the year.

"Our performance continues to underscore what Alpha excels at mining high quality coals and optimizing specifications for our customers, which results in excellent margins," the company said. "Cash cost of sales was in line with our expectations coming into 2006, while per-ton sales revenue is a little better than we anticipated. This gave us solid earnings leverage in the quarter."

The company swung to the first-quarter operating income of $46.6 million, compared with the operating loss of $14 million, a year ago. Operating margin for the quarter was positive 9.7%, compared with the negative margin of 4.5%, a year ago.

By segment, first-quarter revenue from coal segment rose 55.4% from the year-ago period to $424.4 million. Revenue from the freight and handling segment increased 45.9% to $46.4 million and revenue from other segment was up 57.5% to $11.5 million.

The stock closed down 38 cents, or 1.5% to $25.25 Thursday.

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