The Whitehaven Coal Ltd (ASX: WHC) share price has come under pressure in early trade following the release of the coal miner's quarterly update.
At the time of writing the Whitehaven Coal share price is down 2.5% to $3.88.
What happened in the third quarter?
During the quarter the coal miner posted a 17% decline in managed run of mine (ROM) coal production to 4,879,000 tonnes.
This meant that financial year to date total managed ROM coal production is now down 7% on the prior corresponding period to 15,888,000 tonnes.
Total managed coal sales increased 12% during the quarter to 6,042,000 tonnes, bringing year to date sales to 16,300,000 tonnes. This reduced the year to date decline in managed coal sales to approximately 6%.
But unfortunately for the company, it has once again seen the average price achieved for both its thermal and metallurgical coal decline.
During the third quarter the company averaged a price of US$97 a tonne for thermal coal and US$120 a tonne for metallurgical coal. This was a decline of 7.5% and 2.4%, respectively, on the prior corresponding period. It was also lower than the prices achieved in both the first and second quarters of FY 2019.
Finally, management has downgraded its total ROM coal production guidance for the full year from between 22 and 23.2 Mt to between 21.8 and 22.8 Mt. It also lifted its sustaining capital expenditure guidance higher.
Should you invest?
Whilst Whitehaven Coal's shares look dirt cheap at this level and its trailing 7.5% dividend yield (excluding special dividends) is very attractive, I'm going to give its shares a miss until coal prices strengthen.
In the meantime, I think diversified miners such as BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) would be better options for investors that are looking for exposure to the resources sector right now.
