Walter Energy Earnings: Margins Keep Shrinking

On top of swinging to a loss in the most recent quarter, Walter Energy Inc. (NYSE:WLT) also came in short of analyst estimates.

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Walter Energy Earnings Cheat Sheet for the Third Quarter

Results: Reported a loss of $1.1 million ($16.97 per diluted share) in the quarter. Walter Energy Inc. had a net income of $87,080 or $1.39 per share in the year-earlier quarter.

Revenue: Fell 11.1% to $612 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Walter Energy Inc. fell short of the mean analyst estimate of 55 cents per share. It fell short of the average revenue estimate of $663.1 million.

Quoting Management: “Our operational results in the third quarter were encouraging as we improved metallurgical coal production 14% as compared to the second quarter, while lowering cash costs of production,” said Walt Scheller, Chief Executive Officer. “However, the recovery in the global economy and metallurgical coal markets is uncertain. As a result we are focusing on achieving further cost reductions, tightly managing capital spending and reducing marginal production in order to improve our results and be well positioned going into 2013.”

Key Stats:

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 43 cents versus a mean estimate of net income of 39 cents per share.

Looking Forward: For the next quarter, analysts are growing pessimistic about the company’s expected results. The average estimate for the fourth quarter is now a loss of 25 cents per share, down from a profit of 96 cents ninety days ago. At $1.35 per share, the average estimate for the fiscal year has fallen from $2.99 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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