Business

Massey loses $70.1 million in 4th quarter

CHARLESTON, W.Va. — Struggling mine operator Massey Energy Co. said lower-than-expected coal production and other problems contributed to mounting fourth-quarter losses.

Richmond, Va.-based Massey said Tuesday night it lost $70.1 million, or 69 cents per share, in the final three months of 2010. Massey earned $24 million, or 28 cents per share, in the fourth quarter of 2009. Revenue rose to $730 million, from $583.9 a year earlier.

The results come as Massey shareholders mull a $7.1 billion takeover offer from rival Alpha Natural Resources. Massey accepted the offer Saturday. The deal would create the world's third-largest producer of high-priced coal for steel manufacturing. It is expected to close at midyear, pending regulatory and shareholder approval.

"We are disappointed with our results in the fourth quarter, but we remain committed to making significant improvements going forward," Chief Executive Baxter Phillips said in a statement.

Massey blamed a "significant" reduction in the number of shifts worked by miners, lower productivity from underground mines and higher ratios of rock to coal at surface mines, among other things.

Costs soared to $62.67 per ton compared with $49.87 in the fourth quarter of 2009, Massey said.

Massey has struggled with mounting losses since the explosion that killed 29 miners at its Upper Big Branch mine April 5, 2010. Massey said it incurred $23.1 million in expenses related to the explosion during the quarter.

For the full year, Massey said it lost $166.6 million, or $1.71 per share, on revenue of $3.04 billion. Massey earned $104.4 million, or $1.22 per share, on revenue of $2.7 billion in 2009.

Massey said it expects to ship 43 million to 47 million tons of coal at an average of $81 to $86 per ton in 2011.

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