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What: Shares of coal producer Patriot Coal (NYS: PCX) fell 10% today after the company reported a reduced output forecast.
So what: The bad news was widespread for Patriot coal today. Two longwall mines that were moved during the third quarter took longer than expected, and a roof fall in the Big Mountain complex caused the company to close the mine. As a result, production is expected to be down 450,000 tons and cost per ton will be higher than expected.
Now what: Before today's announcement, analysts were expecting Patriot Coal to report a $0.29 loss in the third quarter, so this is bad news in a quarter that didn't look good to start with. Management wasn't exactly clear about what final production is expected to be, but a 450,000 ton loss is a significant amount compared to the 8.1 million tons the company sold in the second quarter. I'll take a wait-and-see approach to shares right now and would prefer to see a profitable quarter before getting too excited about the stock.
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At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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