James River Sells Less Coal, Posts Profit on Debt Swap

Commodities & Metals

Published: August 9, 2013 7:55 am

Last Updated: April 28, 2020 12:07 am

James River Coal Co. (NASDAQ: JRCC) reported second-quarter 2013 results before markets opened this morning. The coal miner’s diluted earnings per share (EPS) of $1.16 on revenues of $160.15 million. In the same period a year ago, the company reported an EPS loss of $0.74 on revenues of $277.36 million. The consensus estimates called for an EPS loss of $1.33 on revenues of $195.07 million.

The numbers are a bit deceiving. James River’s operating loss for the quarter came to $35.4 million, nearly triple its operating loss of $12.47 million in the second quarter of last year. The difference is that the company posted a pretax gain of $101.21 million related to Private Exchange Transactions in which it issued $123 million in 10% convertible senior notes due in 2018 for $90 million in 4.5% convertible senior notes due in 2015 and $153.4 million in convertible senior notes due in 2018.

The company’s CEO said:

Things are still interesting in the coal industry. … The thermal markets are still weak, but we can see several factors that may lead to improvement later this year and into 2014. The met markets have clearly weakened during the past several months. We are a little more cautious about met than we had been earlier this year. We have started to take definitive action to strengthen our balance sheet and improve our liquidity position during this period of soft coal markets.

The company did not provide guidance in its press release, other than to raise its current sales orders for Appalachian coal by 617,000 tons. The consensus estimates for third-quarter EPS and revenues come in at a loss of $1.24 per share on $196.15 million in revenue. For the full year, James River is expected to lose $4.99 a share on sales of $776.44 million.

Shares are up about 11.2% in premarket trading this morning, at $1.98 in a 52-week range of $1.46 to $5.89. Prior to today’s release Thomson/Reuters had a consensus price target of around $2.40 on the company’s shares.

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