Massey Energy Guidance Warning Punishes Shares

Massey Energy updated its 2010 operating outlook late Thursday to come in at the low end of its previously announced guidance range, citing idle mines and "increasingly stringent" mining regulations.

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The coal producer acknowledged that production has fallen since the April blast that killed 29 miners, and it said it expects to post an operating loss in the third quarter.

The federal Mine Safety and Health Administration is currently investigating the April 5 fatal blast at Massey's Upper Big Branch mine in West Virginia.

"Our operations have continued to struggle since April," said Massey's Chief Executive Don Blankenship. "We now expect our third quarter shipments to approximate 10 million tons, and we expect to report an operating loss for the quarter."

For full-year 2010, the energy company expects to ship about 39 million tons of coal, the low point of its earlier anticipated shipment range of 39 to 40.5 tons.

The company expects to sell each ton at an average price of $71, also the low end of an estimated range of $71 to $73 a ton. The average cost of shipping is now expected at about $60 a ton, although Massey had anticipated the expense to be as low as $56 a ton.

Massey Energy shares slid in after hours trading, after closing at $32.36 a piece on Thursday.

The company maintained its 2011 targets and is scheduled to post its third quarter 2010 results on October 26, 2010 after the bell.