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Walter Industries Inc. Reports Operating Results (10-Q)

November 05, 2010 | About:
10qk

10qk

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Walter Industries Inc. (WLT) filed Quarterly Report for the period ended 2010-09-30.

Walter Industries Inc. has a market cap of $4.95 billion; its shares were traded at around $94.96 with a P/E ratio of 23.4 and P/S ratio of 5.1. The dividend yield of Walter Industries Inc. stocks is 0.6%. Walter Industries Inc. had an annual average earning growth of 1.7% over the past 10 years.WLT is in the portfolios of John Keeley of Keeley Fund Management, George Soros of Soros Fund Management LLC, Stanley Druckenmiller of Duquesne Capital Management, LLC, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Our income from continuing operations for the three months ended September 30, 2010 was $137.0 million, or $2.57 per diluted share, which compares to $24.4 million, or $0.45 per diluted share, for the three months ended September 30, 2009. In the three months ended September 30, 2010, net sales and revenues increased $186.0 million and operating income increased $165.4 million versus the same period in 2009. Revenue and operating income improvements in the third quarter were primarily due to higher coking coal pricing in the Underground Mining segment.

Approximately 1.9 million tons of coking coal were sold in the third quarter of 2010 at an average price of $206.62 per short ton as compared to an average price of $121.66 per short ton on similar volumes for the third quarter of 2009. Coking coal pricing for the fourth quarter of 2010 is expected to average approximately $195.00 per short ton. Most of the Company's coking coal volumes are committed for 2011, but are subject to agreement on price. All of the Company's 2011 contract sales volume is currently unpriced, leaving the Company well positioned to benefit from what we see as a strong price environment. Our sales volume expectation for the fourth quarter ranges from 1.7 million to 2.0 million tons and our forecasted fourth quarter operating income per ton ranges from $84.00 to $87.00. Coking coal margins are expected to be lower during the fourth quarter, primarily due to lower pricing and due to higher costs per ton resulting from the expected delayed start of the second longwall panel in the Mine No. 7 East expansion. We continue to make good progress on the development of the next panel in the Mine No. 7 East expansion, and we expect to start up the longwall in early December 2010. Coking coal production totaled 1.8 million tons in the third quarter of 2010, as compared to 1.5 million tons during the same period in 2009. The increase in production was generated primarily from incremental tons from the Mine No. 7 East expansion. These incremental tons 20

During the third quarter of 2010, the surface mining operations produced 391,000 tons and sold 368,000 tons of steam and industrial coal, as compared to 359,000 tons produced and 302,000 tons sold during the third quarter of 2009. The increased sales volume primarily resulted from coal blending opportunities and inventory availability. Operating income in the third quarter of 2010 was $6.7 million, compared to $6.8 million in the third quarter of 2009. Operating income was essentially unchanged despite higher revenues, primarily as the result of higher mining ratios and difficult geologic conditions in the third quarter of 2010 as compared to the same period in 2009. In the fourth quarter of 2010, we expect to sell between 382,000 tons and 403,000 tons resulting in operating income of between $13.00 to $17.00 per ton. Walter Coke

Walter Coke sold 111,000 tons of metallurgical coke during the third quarter of 2010 and reported net sales and revenues of $47.9 million and operating income of $6.3 million versus net sales and revenues of $23.3 million and an operating loss of a $0.2 million in the same period of 2009. Revenues and operating income improved primarily on increased sales volumes and average selling prices over the prior-year period. Fourth quarter 2010 metallurgical coke sales are expected to be between 85,000 tons to 88,000 tons. Lower coke pricing and sales volumes related to recent softness in the domestic steel 21

Net sales and revenues for the three months ended September 30, 2010 were $464.3 million, an increase of $186.0 million from $278.3 million in the same period in 2009. The increase in revenues was primarily due to higher average selling prices for coking coal from our Underground Mining segment.

Cost of sales, exclusive of depreciation, increased $9.8 million to $200.5 million, a 5.2% increase from $190.7 million in the third quarter of 2009, primarily as the result of increased volumes, higher production costs and higher raw material costs at our Surface Mining and Walter Coke segments. Cost of sales represented 43.6% of net sales for the three months ended September 30, 2010 versus 69.0% of net sales for the same period in 2009. This reduction of cost of sales as a percentage of sales is primarily the result of increased selling prices.

Read the The complete Report

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