IB Net Payout Yields Model

Did Alpha Natural Resources Inc Really Just Report a Profit?

The coal sector continues to be hammered with declining prices and lower margins, causing some large miners to continuously report losses. In the case of Alpha Natural Resources (NYSE: ANR  ) , the metallurgical-focused miner is facing lower pricing for the prime coal used to produce steel. Its most recent earnings report showed that the company generated a very shocking profit, however.

At first glance, Alpha Natural suggested that the company produced first quarter 2014 revenue of $1.1 billion and adjusted EBITDA of $289 million. Considering the weaker metallurgical coal markets and that the company only made an adjusted EBITDA of $71.4 million in the prior quarter, these numbers seemed off. After quickly reviewing the details, the gains were based on an asset transaction that was clearly too good to be true.

Read full article here.

Disclosure: Long ANR. Pleas read this disclaimer page for more details.


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