Shares of Linthicum Heights-based Foundation Coal Holdings Inc. reached their lowest level on record after the U.S. coal producer reported a greater third-quarter loss than expected on increased mine inspections and adverse geological conditions.
Foundation sank $4.85, or 23 percent, to $16.30 a share on the New York Stock Exchange. Earlier, it touched $14.86, the lowest since the company initially sold shares at $22 in December 2004.
The stock has dropped 69 percent this year.
Foundation had a loss of $32.2 million, or 71 cents a share, compared with net income of $1.9 million, or 4 cents, a year earlier, according to a statement yesterday. Foundation was expected to lose 3.6 cents, the average of eight analyst estimates compiled by Bloomberg. Sales rose 14 percent to $400.7 million.
Mine inspections were higher than in previous quarters partly because of safety regulations imposed by the 2006 Miner Act.
Ann Kohler, an analyst at Caris & Co. in New York who has an "average" rating on the shares and owns none, said,. "Their labor and diesel costs were up, and their productivity came down because of the inspections."
Producers with underground mines such as Consol Energy Inc. and Massey Energy Co. also fell on concern about increased inspections.
"This is affecting all the major underground producers," said John Kang, a coal analyst at RBC Capital Markets in New York. "The safety inspectors seem to be shutting down mines for little infractions."
Foundation reduced its 2008 profit forecast to 27 cents to 65 cents a share from a July estimate of $1.05 to $1.55. Analysts expected Foundation to earn 50 cents for the year. For 2009, profit from operations will be $525 million to $625 million, down from a July forecast of $625 million to $725 million.
"We are clearly disappointed with these results," said Chief Executive Officer James Roberts.