Goldman Reduces Estimates For Patriot Coal Corporation

In a recent report from Goldman Sachs, Patriot Coal Corporation PCX provided an operational and guidance update. Keys updates include 3Q2010 volume guidance reduced about 10% due to downtime at two mines and geological conditions at others. Work at the Federal mine had been idled due to high methane levels though operations have been resumed today. Because of the conditions, Goldman Sachs GS sees 2010/2011/2012 EPS estimates at -$1.82/$0.20/$0.71 from -$1.42/$0.25/$0.75 on lower production, higher unit costs, and interest expense. Goldman Sachs reiterates their Sell rating on PCX despite the underperformance citing a less attractive asset mix. Also seen are limited opportunities for PCX to improve its earnings power relative to it's peers. Execution remains a downside risk to 2011 estimates, though Goldman says it could remain more positive if they were to see improved relative upside, the emergence of additional higher quality met coal capacity, or successive quarters without material product disruptions PCX closed Monday at $11:39