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Alpha Natural Increases After Smaller-Than-Expected Loss

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Nov. 2 (Bloomberg) -- Alpha Natural Resources Inc., the second-largest U.S. coal producer by sales, rose after reporting a narrower-than-expected third-quarter loss and saying that the domestic market for power-station coal has rebounded.

Alpha climbed 2.3 percent to $9.06 in New York after earlier gaining as much as 9.6 percent. The shares have fallen 56 percent this year through yesterday.

The quarterly loss excluding goodwill impairment and other items was 16 cents a share, the Bristol, Virginia-based company said today in a statement. The average of 27 analysts’ estimates compiled by Bloomberg was for a 45-cent loss.

There has been a “gradual” improvement in the U.S. market for thermal coal since the spring, Alpha said. The company is among U.S. producers who have cut tens of millions of tons of output this year after slower global growth and competition from lower natural gas prices damped coal demand. Global production of metallurgical coal, which is used by steelmakers, has been cut by as much as 30 million tons, Alpha said today.

Despite the decline in domestic demand and a drop in Alpha’s Appalachian production, the company’s shipments from the Powder River Basin region, which covers parts of Montana and Wyoming, rose 4.8 percent to 13.2 million tons in the quarter.

Its average realized price for coal mined in the region rose to $12.87 a ton from $11.98. Still, Alpha said Sept. 18 that cutbacks in the Powder River Basin will comprise some of the 16 million tons of additional reductions it’s planning.

The company had a third-quarter net loss of $46.1 million, or 21 cents a share, compared with net income of $62.6 million, or 28 cents, a year earlier. Sales fell to 29 percent to $1.63 billion from $2.31 billion, trailing the $1.68 billion average of 17 estimates.

Peabody Energy Corp. is the country’s largest coal producer.

-- Editors: Simon Casey, Jasmina Kelemen

To contact the reporter on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net

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