SAN FRANCISCO, Oct 27 - Massey Energy Co (MEE.N),which has idled coal mines to cut costs, reported a drop in quarterly profit on Tuesday and trimmed its shipment outlook as demand remained weak, knocking 4 percent off its shares. "Coal contracting and shipment activities remained slow and coal stockpiles increased during the third quarter of 2009 as total electric power generation declined and switching to natural gas fired generation continued," the coal miner said in a statement. But Massey pointed to increased steel production in China and rising natural gas prices as positives amid the generally difficult global market conditions. Its third-quarter operating cash margin per ton was $11.98,down from $16.10 in the same quarter last year. Net income was $16.5 million, or 19 cents per share, compared with $51.6 million, or 61 cents per share a year earlier. Revenue slumped 16 percent to $641.6 million. Analysts had expected earnings of 18 cents per share on revenue of $687 million, according to Thomson Reuters I/B/E/S. The Richmond, Virginia-based company said prices for its coal were hit hard by the fact 70 percent of its shipments went to the generally depressed utility sector [ID:nN15296040], up from 65 percent a year ago. Massey now expects 2009 produced coal shipments of 37.5 million to 38.5 million tons, down from a forecast in July of
38.5 million to 40.5 million tons. For 2010, it expects shipments of 37 million to 41 million tons -- bringing down the top end of the range by a million. To cut costs, Massey has idled higher-cost mines, limited overtime and renegotiated supply contracts. It has cut 700 jobs this year and five senior executives, including Chief Executive Don Blankenship, said they were taking 10 percent salary cuts. Massey shares dropped 4 percent in after-hours trading on Tuesday to $30.06, their lowest for more than two weeks. But
the stock has more than doubled in 2009, lifted by the brightening economic outlook.
38.5 million to 40.5 million tons. For 2010, it expects shipments of 37 million to 41 million tons -- bringing down the top end of the range by a million. To cut costs, Massey has idled higher-cost mines, limited overtime and renegotiated supply contracts. It has cut 700 jobs this year and five senior executives, including Chief Executive Don Blankenship, said they were taking 10 percent salary cuts. Massey shares dropped 4 percent in after-hours trading on Tuesday to $30.06, their lowest for more than two weeks. But
the stock has more than doubled in 2009, lifted by the brightening economic outlook.
