Jefferies Comments On Alpha Natural Resources Following Recent Earnings Release

Alpha Natural Resources ANR reported adjusted EPS of $0.65 per share versus Jefferies expectations of $0.90 and consensus of $0.91. Costs and longwall moves hit the quarter, but met coal pricing quotes appear quite strong for its high vol mix. Alpha Natural Resources delivered results for the first quarter that missed Jefferies expectations due to lower than expected volumes and higher than expected mining costs in Eastern operations. Q1 shipments of 21.0 million tons also missed expectations of 21.8 million tons. Within total first quarter shipments, met coal shipments of 3.6 million tons beat Jefferies expectations of 3.25 million tons. Alpha delivered a profit margin of $12.49 versus Jefferies $13.48/ton estimate. Costs increased due to longwall moves, higher sales-related costs, mix-shift. Jefferies continues to stress potential upside to an initial estimate of $150 million for synergies; realized synergies from Alpha's Foundation purchase exceeded initial estimates by 30%. Jefferies has an $80 PT and buy rating on ANR ANr is trading lower at $55.64