Foundation Coal will look for a strong second quarter.
Following slight decreases during the first quarter of 2007, Linthicum Heights-based Foundation Coal Holdings Inc. said last week it would announce its second-quarter results during a conference call Aug. 1. During the second three-month period of its fiscal year, Foundation saw one of its affiliated mines close inWabash, Ill., but also a new labor deal reached with the miners union at other locations.
“The coal sector, although boring and unloved, is going to do well, assuming the government doesn?t pass any [substantial] carbon legislature,” said Michael Tian, a company analyst with Morningstar.
For the first quarter, Foundation saw sales revenues dip less than 1 percent from the same time a year ago, down to $386.2 million. However, operating income fell about $10 million to $42.3 million. The company also experienced a hit of $2.2 million from termination expenses related to the Wabash mine closing.
Despite these negatives, coal production increased 6 percent from the year before, and the health of the industry seems strong, Foundation officials said.
“Our market strategy has afforded us a high degree of top-line visibility,” James F. Roberts, chairman and chief executive officer of Foundation, said in a statement. “Moreover, we are not in a position of having to make significant reductions in production given our highly contracted position.”
Also during the second quarter, Cumberland Coal Resources LP, an affiliate, was selected as Mining Media?s Industry Top Performer. This is the second consecutive year Cumberland has won the award. The company has reached new production levels in each of the last two years, hitting 7.9 million and 8.3 million tons of raw coal, respectively.
“I don?t expect to see any big negative surprises,” Tian said.
Foundation Coal is part of The Examiner Top 10, a portfolio of some of the largest publicly traded companies in the Baltimore region.
