UPDATE 2-Alliance Resource ups FY10 outlook; shares rise

* Sees FY10 profit $305 mln to $335 mln vs est. $204 mln

* Says secured sales for about 29.8 million tons in 2011

* Q2 EPS $1.82/lpu vs est. $1.38/lpu

* Rev up 32 pct to $400.3 mln

* Shares up 5 pct

(Adds conference call details, share movement)

July 26 (BestGrowthStock) – Diversified coal producer Alliance
Resource Partners LP (ARLP.O: ) raised its full-year outlook and
said it expects FY11 contract base and average price level to
be higher than FY10, sending its shares up 5 percent.

The company sees 2010 net income of $305 million to $335
million on revenue of nearly $1.6 billion, excluding
transportation revenues.

Revenue for the third quarter and fourth quarter is
expected to be at a level that is comparable to second quarter,
Alliance said on a conference call with analysts.

It had previously forecast annual net income between $270
million to $300 million, on revenue of $1.5 billion to $1.6
billion, excluding transportation revenues.

Analysts on average expect full-year income of $204 million
on revenue of $1.59 billion, according to Thomson Reuters

The company, that mainly produces steam coal for U.S.
utilities, sees continued higher coal demand as Energy
Information Administration estimates a 3.5 percent
year-over-year growth in electricity demand for the remainder
of 2010.

Alliance said it has recently executed new coal sales
agreements for delivering 7.1 million tons over the next four
years at a price level 15 percent to 20 percent above its
current average price realizations, Chief Executive Joseph
Craft said on a conference call.

The company that currently operates nine underground mining
complexes expects a higher contract base and average sales
price level in 2011 compared with 2010.

It has already secured sales commitments for about 29.8
million tons in 2011.

“Based upon current negotiations and other expressions of
interest by utilities, Alliance is hopeful that we can sign
additional new long-term contracts this year, enabling us to
maintain 16 continuous mining shifts of production at the River
View mine,” Craft told analysts.

Production at the company’s River View mine could go up 10
percent above its design level of 6.4 million tons, it said.

Shares of the Tulsa, Oklahoma-based company were trading at
$49.49 Monday afternoon on Nasdaq.


Alliance posted higher-than-expected quarterly results,
helped by strong coal sales.

For the latest second quarter, the company reported net
income of $85.5 million, or $1.82 per limited partner unit,
compared with $41.5 million, or 72 cents per unit, a year

Revenue rose 32 percent to $400.3 million.

Quarterly production volumes rose 9 percent to 6.9 million
tons, while average coal sales prices rose about 12 percent to
$51.53 per ton sold.

Analysts on average expected the company to earn $1.38 per
unit, on revenue of $393.45 million.

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(Reporting by Vinay Sarawagi in Bangalore; Editing by Vyas

UPDATE 2-Alliance Resource ups FY10 outlook; shares rise