Peabody Energy Corporation (BTU), Walter Energy, Inc. (WLT): Coal Stocks Improved on Cost Cuts Though Stocks Slump

Analysts expect revenue to slump 27% this year due to mine closures and slumping prices. With the company already a significant money loser, lower costs are a must for Alpha Natural Resources, Inc. (NYSE:ANR) to ever recover to profitable operations.

Bottom line

The coal companies are doing a better job of slashing costs to go along with the reduced pricing amid higher inventories and a slowing global economy. While the stocks remain at multi-year lows, signs are emerging that demand will continue growing as China, Germany, Japan, and India continue to drive increased imports of met and thermal coal. Unfortunately, coal supplies from Indonesia, Mongolia, and Australia are putting pressure on pricing as supplies outstrip demand. Eventually though, the demand supply equation will get back into favor of the suppliers providing for gains in stocks priced as if coal demand is falling.

Mark Holder and Stone Fox Capital Advisors, LLC  own shares in Alpha Natural Resources. The Motley Fool has no position in any of the stocks mentioned. Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Coal Stocks Improved on Cost Cuts Though Stocks Slump originally appeared on Fool.com is written by Mark Holder.

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