Arch Coal Profit Misses Forecasts on Production Cuts
Arch Coal Friday that third-quarter profit fell 46 percent as a result of production cuts, missing Wall Street forecasts, but the miner said market conditions were improving.
The solid fossil fuel firm's shares on Friday gained 26 cents to trade at $36.09 on the New York Stock Exchange.
Net earnings were $27.2 million, or 19 cents per share, compared with $50.8 million, or 35 cents per share, in the same quarter last year, the St. Louis-based company said.
Analysts on average forecast that Arch would post earnings of 27 cents per share, according to Reuters Estimates.
In July, Arch announced some production cuts, but said although it would mine less coal than expected, it sees the market gradually improving later this year as electric utilities draw down stockpiles of coal.
"U.S. coal market fundamentals improved during the third quarter and momentum appears to be increasing as we move through the fourth quarter due to positive trends in key demand supply factors," Chairman and Chief Executive Steven Leer said in a statement.
Revenue slipped slightly to $599.2 million from $610 million a year earlier.
Total tons of coal sold fell to 32 million tons from 34 million last year, while the average sales price climbed to $16.31 per ton from $16.02.
Costs per ton fell to $12.04 from $12.44, helping widen its operating margin to $2.60 per ton from $1.87.
Arch also said it had started operations it Laurel complex in Central Appalachia, which will produce 900,000 tons in the fourth quarter as it ramps up to full production of 4 million to 5 million tons next year.