RICHMOND, Va. (AP) — James River Coal Co. on Wednesday posted a first-quarter loss that wasn't as big as Wall Street expected, as it said some markets are improving and its restructuring changes are yielding results.
The Richmond, Va.-based company mines thermal coal for power generation and metallurgical coal used to produce steel. It has operations in Kentucky, West Virginia and Indiana.
The coal industry has struggled amid continued soft demand that has driven down prices, as many utilities turned to cheaper natural gas to run generators. Less construction overseas also has slowed the appetite for coal to make steel.
James River Coal posted losses of $42.1 million, or $1.21 per share for the period ended March 31. That compares with last year's losses of $15.7 million during the same quarter, or 45 cents per share.
Total revenue fell 36 percent to $193.3 million as coal revenue decreased by about 37 percent to $175.9 million. Coal shipments shrank by about 21 percent to 2.42 million tons.
Analysts expected a loss of $1.65 per share on revenue of $206 million, according to FactSet.
James River shares rose 10 cents, or 5.8 percent, to $1.75 in midday trading.
In a conference call with investors, CEO Peter Socha said the company is beginning to see benefits in both coal production and costs from a major restructuring of its mines and support services.
The company announced in March that it was idling mines and reducing coal production by 3 million tons because of weak demand.
During the quarter James River Coal's cost of sales fell more than 27 percent to $209.3 million and the company's cost per ton of coal fell about 13 percent to $67.60.
But its gross profit per ton — the amount of sales left over after subtracting the cost of sales — was a loss of $6.61 per ton, compared with a profit of $4.18 per ton a year ago.
Looking forward Socha said the domestic market for thermal coal appears to be benefiting from higher natural gas prices, but the company remains cautious on metallurgical coal.
"Coal markets are improving and we want to make sure that when they get back up to acceptable levels that we are there and we are ready to take advantage of that," Socha said.
Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum .