Massey Energy reports $88.7M second-quarter loss tied to deadly W.Va. mine explosion

Massey Energy reports $88.7M Q2 loss

CHARLESTON, W.Va. — The Upper Big Branch mine isn’t likely to reopen in 2010 because of ongoing investigations and damage from the April 5 explosion that killed 29 men, Massey Energy Co. said Tuesday.

The blast contributed to a second-quarter loss of $88.7 million, or 88 cents per share, in the period. Massey earned $20.2 million, or 24 cents per share, in the same period a year earlier.

Revenue totaled $810.1 million, compared with $697.6 million in 2009.

“The tragedy at Upper Big Branch and the ensuing, contentious investigation overshadowed our day to day operations and largely occupied the time and attention of management,” Chief Executive Don Blankenship said in a statement.

The blast remains the subject of criminal and civil investigations.

Massey said its effects are likely to linger throughout the year. The mine’s longwall mining machine appears to have suffered significant damage, as did track and other equipment and areas being prepared for longwall mining.

Two mining sections located well away from the longwall appear to be largely intact, Massey said. The company is considering asking permission to resume mining in those areas. Developing another entry to access the mine’s reserves also is possible, Massey said.

“We are also continuing our efforts to mitigate the lost production from UBB in order to serve our customers as best we can,” Blankenship said. “These efforts have been disruptive to operations as we move crews and equipment to different locations but they should allow us to improve and stabilize production in the coming quarters.”

Massey’s second-quarter results include $128.9 million in pretax charges because of the explosion. Excluding those charges, Massey said it would have lost $1.6 million or 2 cents per share. Massey said it shipped 1 million fewer tons than expected.

Analysts surveyed by Thomson Reuters expect Massey to earn 33 cents per share in the period.

Virginia-based Massey operates coal mines in West Virginia, Kentucky and Virginia.