Wednesday, April 21, 2010

Massey Energy (NYSE:MEE) Taking Charge in Second Quarter on Upper Big Branch Accident

Massey Energy (NYSE:MEE) said in the second quarter the company will take a charge from the explosion at its Upper Big Branch mine which killed 29 workers.

With metallurgical coal being a prime product and the loss of production at the Upper Big Branch mine, Chief Executive Officer Don Blankenship said they'll make up for that by increasing production at all operating metallurgical coal mines by increasing the work week to six days and adding adding three continuous miner sections at Elk Run mines, which is close to Upper Big Branch.

"Financial results for the second quarter 2010 will include a charge related to the tragic accident at the Upper Big Branch mine," said Blankenship.

"While Massey anticipates further analysis will be required, the company estimates the range of loss to be $80 million to $150 million for charges related to the benefits being provided to the families of the fallen miners, costs associated with the rescue and recovery efforts, insurance deductibles, possible legal and other contingencies."

First quarter results exceeded analysts expectations, as net income was $33.6 million, or 39 cents a share, whereas analysts had been looking for 27 cents a share. Last year during the same quarter net income was $43.4 million, or 51 cents a share.

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