Alliance Resource 2Q profit slips

Coal producer Alliance Resource Partners LP said Monday higher costs drove its second-quarter profit down 21 percent to miss Wall Street expectations, but shares rose as the company's revenue topped estimates and it raised its quarterly dividend.

The Tulsa, Okla.-based company's net income fell to $36.7 million, or 67 cents per unit, from $46.2 million, or 80 cents per unit, a year earlier. Excluding one-time items, the company earned 68 cents per share in the latest period.

Revenue rose 5 percent to $276.2 million from $263.3 million a year ago, largely due to record average per-ton coal sale prices and higher volumes. But operating expenses jumped to $236.7 million from $214.4 million.

Analysts polled by Thomson Financial expected adjusted earnings of 72 cents per share and revenue of $272.43 million.

The company said total average coal sales price per ton increased about 90 cents per ton sold. Coal prices in the Central Appalachian region jumped nearly 7 percent on improved contract pricing and higher spot market prices.

Average coal sales prices per ton in the Northern Appalachian region rose 20.5 percent also due to higher-priced spot and export markets.

Sales volumes increased to 6.6 million tons from 6.3 million tons last year, mainly due to higher Illinois Basin coal sales related to expanded production capacity.

Separately, the mine operator said it increased its quarterly cash dividend by nearly 13 percent to 66 cents per unit, from 58.5 cents per unit in the first quarter.

In morning trading, Alliance shares rose $1.76, or 4 percent, to $46.14.