PREVIEW-UPDATE 1-U.S. coal miners looking at lower profits

* Third-quarter earnings seen sharply down

* Steelmaking coal favored over power generation

* Coal mining stocks down (Updates with mining stocks down, 6th paragraph)

By Steve James

NEW YORK, Oct 16 (Reuters) - Most U.S. coal miners are looking at sharply lower third-quarter earnings, but those that produce coal for steelmaking and export should enjoy higher prices in the longer run than those that sell coal for power generation, analysts say.

Last year's economic downturn hit both steel and electricity demand hard and miners were forced to cut back on production as coal prices slumped. But now there are signs that coal demand, at least from steelmakers, is coming back.

"We generally favor coal producers with international leverage, especially those tied to steel production via metallurgical coal, over thermal coal producers," analyst Jeremy Sussman of Brean Murray, Carret & Co said on Thursday.

And Morgan Stanley's Mark Liinamaa and Wes Sconce said they expected premium hard metallurgical or coking coal for steelmaking to be selling at $160 per tonne in 2010, with prices trending higher through 2013. In June, the benchmark price for coking coal was $129 per tonne.

"Our commodity team sees higher seaborne thermal coal prices going forward but we do not expect demand for U.S. thermal coal exports for the next 12-18 months," the Morgan Stanley analysts said in a research note.