As Alpha Natural Resources
All things considered, I think this picture came out well. Alpha's fourth quarter was not exactly stellar, with per-share earnings coming in 40% below the prior year's result. The miner experienced some of the same cost pressures and shipment disruptions that Patriot Coal
For the full year 2010, Alpha's remarkable 70% improvement to met coal revenues drove home a 46% boost to income from continuing operations, to $97 million. Full-year adjusted EBIDTA struck a company record, surging 47% to $796 million. On a stand-alone basis, the company sees 2011 production volumes for steam coal remaining essentially flat from 2010 levels, while met coal shipments are poised to surge between 9% and 22% during 2011. 68% of that improving volume has been contracted at an average price of $142.23 per ton, for a healthy 25% improvement (thus far) over 2010 realized prices.
Impressively, when we stir the merger pot to consider the combined company on a pro forma basis, we find Alpha conducting the heavy lifting for combined met coal production of 24 million to 26 million tons in 2011. At the midpoint of estimated production guidance, Alpha's operations would contribute 55% of pro forma met coal production. In subsequent years, I expect Massey's assets -- which account for some 76% of pro forma met coal reserves -- to yield the lion's share of long-term production expansion.
As Alpha and Massey drive off into the sunset, there is one glaring pattern from the industry's fourth-quarter reports that I must again bring to your Foolish attention. Widespread weather-related disruptions to Appalachian railroad coal shipments are easy to understand, given the recent weather pattern, but this Fool considers the sheer number of the region's miners referencing suboptimal railroad service a clear sign that there's more to this story than we know. Massey, Alpha, and Arch Coal
Because my review of railroad industry earnings had led me to wonder whether Norfolk Southern
Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns no shares in the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.