nice article, thanks. please post more. i'm going to purchase some aci here in the 17's, i've been waiting for a nice opportunity like today to start dipping my feet in the sector.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Friday July 20, 3:00 pm Eastern Time
Arch Coal earnings fall short of expectations
biz.yahoo.com
NEW YORK, July 20 (Reuters) - Arch Coal Inc. (NYSE:ACI - news), the nation's No. 2 coal company, on Friday reported second-quarter earnings that fell short of Wall Street forecasts due to higher operating costs at two major mines.
St. Louis-based Arch reported net income of $800,000, or 2 cents per share, compared with a net loss of $2.1 million, or 6 cents per share, in the same quarter a year ago. Analysts polled by market research firm Thomson Financial/First Call had expected Arch to earn 5 to 18 cents a share, with a mean estimate of 13 cents.
Arch shares were down $4.40, or more than 19 percent, at $18 in afternoon trade on the New York Stock Exchange. The company reported problems at its West Elk mine in Colorado and its Samples mine in southern West Virginia.
West Elk production was reduced by 60 percent during the second quarter due to high methane levels. Arch President Steven Leer said the mine lost about $9 million in the quarter. The Samples mine had a sandstone intrusion that thinned the main coal seam the company was mining.
Still, Arch should benefit from higher coal prices. Prices on the spot market, where about 20 percent of the fuel is sold, are double what they were last year at this time. Coal prices entered stronger territory when natural gas, coal's main competition, hit record highs last winter. Coal companies generally sell their coal under long-term contracts whose expirations are staggered over several years. As coal prices have risen and older contracts have expired, the outlook for earnings has improved.
In the first six months of the year, Arch secured better pricing on about 6 million tons of central Appalachian coal and 17 million tons of Powder River Basin coal. Arch produces 110 million tons of coal per year -- slightly more than 10 percent of total U.S. annual production -- from 28 mines in the western United States and central Appalachia.
Shares of Peabody Energy (NYSE:BTU - news), the No. 1 U.S. coal company, were down more than 8 percent to $23.30 in afternoon NYSE trade. Peabody reported slightly-better-than-expected earnings on Thursday. |
