Investopedia: Can James River Thrive On Luck And Timing?

Sometimes it is better to be lucky than good. It was not all that long ago that James River (Nasdaq:JRCC) was in serious trouble, but the company leveraged a boom in coal prices by locking up a lot of its forward production at attractive prices and a boom in coal stock prices by issuing equity and cleaning up its balance sheet. With contracts rolling off and James River still operating with a relatively unattractive cost structure, will the company be able to leverage its assets with similar dexterity?


The Quarter That Was
James River reported a so-so end to its 2010 year. Coal revenue did rise nearly 9%, but overall revenue was still a bit shy of analyst expectations. Realized prices looked alright (up more than 12%), but shipments were a little sluggish as the company shipped about 4% less coal this quarter (despite producing almost 3% more).

The company's profitability is likewise still a bit of a muddle. COGS per ton jumped 9%, though, while adjusted EBITDA per ton increased 30%. On a per-share basis it looks like James River missed the average analyst target this quarter once a sizable tax benefit is excluded from the results.

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