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International Coal: Boosted by Met Market

International Coal stock is jumping in Thursday trading following its upbeat outlook on the metallurgical coal market and better-than-expected first quarter.
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NEW YORK (TheStreet) -- Within an hour of Thursday's regular trading session, International Coal (ICO) stock had jumped 5.3% to $5.55 following its upbeat outlook on the metallurgical coal market, and slightly better-than-expected first quarter report, excluding certain items.

International Coal said it expects metallurgical coal pricing to continue to strengthen in the year, primarily due to rising demand in China and India.

For the year, International Coal's committed and priced sales are about 15.8 million tons, or 93% of planned shipments, while metallurgical coal sales are projected to total about 2.6 million tons for the year. For the following year, committed and priced sales are about 8.4 million tons; the company expects to sell about 2.9 million tons of metallurgical coal then.

For the first quarter, International Coal recorded net loss of $8.9 million, or 5 cents a share, dropping from net income of $3.7 million, or 2 cents a share a year ago. The first-quarter net loss included a $22 million pre-tax loss on debt extinguishment related to the company's capital restructuring. Excluding this loss, net income would have been $6.2 million, or 3 cents a share, beating the Wall Street consensus estimate by 2 cents.

"We also moved toward completion of our strategic capital restructuringduring the quarter. Our recapitalization efforts strengthened our liquidity, reduced future interest expense and significantly extended our debt maturity profile," International Coal's chief Ben Hatfield said in a written statement. "In addition, we secured a newcredit facility that provides increased borrowing capacity and greater flexibility."

Revenues were $288.6 million compared with $305 million a year-ago, with the decrease primarily due to the weak thermal market. However, margin per ton sold increased 31% to $11.67 in the quarter, primarily due to higher realized prices and improved operational performance.

"Coal markets continue to show improvement, particularly in themetallurgical sector," Hatfield said. "Metallurgical coal prices have further strengthened with recent international settlements. Thermal coal prices have not recovered to the same degree, but cold winter weather has helped to stabilize the pricing environment for that product."

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