Arch Coal 2Q profit falls on higher costs
Saturday, July 30, 2011
ST. LOUIS (AP) — Arch Coal Inc. said Friday that its second-quarter profit fell sharply as it produced less coal and costs rose, and it offered a disappointing outlook for full-year earnings.
Its shares fell 25 cents to $25.52 in afternoon trading after dropping as low as to $24.33 earlier Friday.
Arch Coal said its net income fell to $11.1 million, or 6 cents per share, for the three months ended June 30 compared with $66.2 million, or 41 cents per share, a year earlier. The company said that excluding items, mostly related to the acquisition of International Coal Group that closed last month, it would have earned 44 cents per share.
Analysts had expected adjusted earnings of 61 cents per share.
Revenue climbed to $985.1 million from $764.3 million. Analysts expected $954.3 million.
Arch said it sold 36.7 million tons of coal, compared with 38.1 million tons in the second quarter of 2010.
Overall operating costs per ton rose 6.5 percent, which Arch attributed to lower sales of Powder River Basin coal. The cost per ton rose while margin per ton fell for Powder River production.
Arch said it expected a "very strong" second half of the year and full-year earnings excluding items of $1.75 to $2.15 per share. Analysts were expecting adjusted earnings of $2.40 per share, according to FactSet.