Walter Industries: One for the Shopping List

| About: Walter Energy, (WLT)

We are alternating blow out numbers between coal and fertilizer, and ironically they just keep selling off. On to Walter Industries (NYSE:WLT) which is mostly a metallurgical coal company but also has a housing component - I know, I know - strange [May 1: Walter Industries - the Most Fascinating Company] Since all news is bad news, I have cut back this position, but again we are keeping our mental shopping list of names with superior fundamentals and waiting for them to either be sold off harder and or show some strength on their charts. Walter Industries beat by a measly 37 cents (yawn) - frankly these coal names are beating estimates by a far wider margin in 2008 than I estimated; again these are 2009 stories in my eye. But I'll take it; even as the market spits on it. Until good news is rewarded (or stocks sell off significantly from here), there is no reason to buy merchandise in this market.

  • Walter Industries, Inc., a leading producer and exporter of U.S. metallurgical coal for the global steel industry, today reported net income of $50.8 million, or $0.94 per diluted share, for the quarter ended June 30, 2008 compared to $18.1 million, or $0.34 per diluted share, in the second quarter 2007. (analysts at $0.57)
  • "Our overall financial performance in the quarter was outstanding, particularly in our core Natural Resources and Sloss businesses, which reported their best quarterly performance ever," said Walter Industries Chairman Michael T. Tokarz.
  • Net sales and revenues for the second quarter 2008 totaled $370.0 million, driven by higher metallurgical coal and coke pricing, as well as improved sales volumes of both mined and purchased coal.
  • Operating income from continuing operations for the second quarter 2008 totaled $82.3 million compared to $33.0 million in the second quarter 2007. Operating income in the current period was higher primarily on strong metallurgical coal and coke pricing, as well as increased sales volumes.

This is just so funny that we are talking about the same company, but....


  • The Financing & Homebuilding group reported second quarter revenues of $90.9 million, compared to $123.2 million in the prior-year period. Revenues were lower primarily as a result of fewer unit completions and a $4.2 million increase in the discount on instalment notes originated in the quarter.

Disclosure: Long Walter Industries in fund and will be much longer once the market acts normal; no personal position