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What: Shares of coal producer Patriot Coal
So what: The bad news was widespread for Patriot coal today. Two longwall mines that were moved during the third quarter took longer than expected, and a roof fall in the Big Mountain complex caused the company to close the mine. As a result, production is expected to be down 450,000 tons and cost per ton will be higher than expected.
Now what: Before today’s announcement, analysts were expecting Patriot Coal to report a $0.29 loss in the third quarter, so this is bad news in a quarter that didn’t look good to start with. Management wasn’t exactly clear about what final production is expected to be, but a 450,000 ton loss is a significant amount compared to the 8.1 million tons the company sold in the second quarter. I’ll take a wait-and-see approach to shares right now and would prefer to see a profitable quarter before getting too excited about the stock.
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