Alpha Natural Resources Inc. (NYSE: ANR) beat earnings by $0.19 and beat on revenues, and it maintained its 2014 shipments guidance for eastern metallurgical and eastern steam coals. For second-quarter operating earnings it reported a loss of $0.56. While this is still a wide loss, this is handily better than expectations. Revenues were down by 21.0% from the second quarter of 2013, but at $1.1 billion they also beat expectations.

Coal markets remained extremely challenging in the quarter. While much of Alpha’s business climate is out of its control, Alpha said that it will continue to focus its efforts on what the company can control. Alpha’s previously announced cost controls were represented as yielding solid results.

Metallurgical coal market has shown very little improvement over the past several months, and it is still represented as being an oversupplied market, even if pricing may have reached a bottom. Thermal coal demand remains pressured. Alpha is maintaining its 2014 shipments guidance for eastern metallurgical and eastern steam coals, while lowering its Powder River Basin guidance due to poor rail performance in the West.

Sterne Agee’s Michael Dudas keyed in on Alpha Natural Resources’ earnings report. His flash note maintained his Buy rating, and it even maintained a $10 price target, which seems almost too high to be valid at this point. Dudas said:

Second quarter earnings exceeded expectations on impressive Eastern cost performance. While most difficult from a social and community standpoint, Alpha took the necessary steps to further rationalize coal supply as regulatory and economic headwinds marginalize some Eastern output. The company lowered Eastern costs guidance by another $1.50/ton. Additional met and Eastern thermal pricing was below our targets. Total liquidity access remains comfortable at $2.4 billion.

Alpha Natural Resources shares traded up as much as 6% to $3.62 in the first 90 minutes of trading on Wednesday after the news, and its 52-week range is $3.10 to $8.30. The Thomson Reuters consensus target price is $4.77.

As you can see, the coal sector continues to be far from good in the forecasting and trend reporting — even if this report was far “less bad” than expected. Still, sometimes all that matters is that things are less bad than expectations.

ALSO READ: Why Do Analysts Keep Upgrading U.S. Steel After Earnings?

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