The company said it now expects to report a loss of US30-37c a share for the two months to December 31, which it calls the "stub period", including an operating loss of US15-20c a share and non-recurring charges of US15-17c per share.
It is also revising its 2002 earnings projections to reflect its response to the weakening coal market.
Massey said it has increased its estimated reserves as a result of the Enron bankruptcy by US$2.5 million to US$7.5 million.
Other non-recurring charges include reserves for a potential litigation settlement with West Virginia regarding workers' compensation liabilities incurred by independent contractors who previously worked for Massey companies.
Charges also include the buyout of a coal supply contract and a reserve taken for a December jury verdict concerning a wrongful discharge suit filed in 1988 by a former employee.
Mild weather, softening steel demand and the general economic recession following September 11 have led the company to lower its estimate of 2002 Central Appalachian coal demand.
Massey said it now expects production and sales of 50 million tons, EBITDA of US$340-380 million and capital expenditure of US$180 million.
It had previously targeted production of 56 million tons, EBITDA of US$400-460 million, and capital expenditure of US$240 million.
The company plans to release results for the two-month stub period on January 30.
