Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of coal producer Patriot Coal
So what: Driven largely by higher metallurgical, steel-making coal costs, and a mine waste treatment charge, Patriot Coal posted a quarterly loss of $12.4 million, or $0.14 per share, versus the average analyst estimate of a $0.07 per share profit. The shares had run up about 15% over the past month, so today's results -- representing its 12th straight quarterly loss -- come as an extra-big disappointment to Mr. Market.
Now what: Investors should expect more short-term pain. While Patriot is actively focusing its attention on met coal, management noted that new mine openings, higher labor costs, and sales-related expenses will significantly raise its production costs. Of course, given China and India's voracious appetite for steel, today's plunge in Patriot shares might be providing a solid long-term opportunity.
Interested in more info on Patriot Coal? Add it to your watchlist.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.
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