S&P: James River unaffected

Standard & Poor's said its ratings and outlook on James River Coal Co. (B/stable) remain unchanged following the announcement of the company's third-quarter earnings results, which were considerably weaker than expected.

The agency noted the primary reasons for the shortfall are higher operating costs from escalating raw material prices and lower productivity at a couple of its new mines.

S&P said it is concerned about the negative impact these issues will have on the company's fourth-quarter cash flows and liquidity level.

However, the company's margins are expected to expand in 2006, with a substantial amount of the company's production committed at higher prices and expectations that productivity improvements at the new mines will help to offset raw material price increases, the agency added.

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