Macquarie Slashes Massey (NYSE:MEE) After Lower Guidance

After Massey Energy Company (NYSE:MEE) lowered its guidance, Macquarie downgraded the stock from "Outperform" to "Neutral."

Not only has the company lowered its outlook for shipments, but also expects a loss in the third quarter.

Massey's Chairman and CEO Don Blankenship said, "Our operations have continued to struggle since April. As we have noted earlier,
increasingly stringent enforcement actions by MSHA across our
operations and throughout the Central Appalachian region have resulted
in lost shifts and loss of productivity. In addition, our Revolution
longwall mine was idled in June for a planned longwall move but has
remained down pending approval of its ventilation plan. As a result of
these and other factors, we now expect our third quarter shipments to
approximate 10 million tons and we expect to report an operating loss
for the quarter."

Concerning guidance for 2011, Blankenship added, "We remain confident that we will achieve operational improvements going forward. As the Upper Big Branch investigation winds down, we have refocused management time and attention on our ongoing operations and we are initiating actions to improve productivity and re-establish operating consistency in all our mines. In addition, our early negotiations with metallurgical coal customers give us reason to expect pricing in 2011 will be favorable to what we have realized in 2010. Our guidance for 2011 remains unchanged."

Results for the third quarter will be released on after the close of the market on October 26, 2010.