Arch Coal Inc.
) reported second-quarter 2014 adjusted loss of 46 cents per share,
narrower than the Zacks Consensus Estimate of a loss of 48 cents
but much wider than the year-ago loss of 29 cents per share.
The deeper loss was due to soft metallurgical market conditions and
lower realized prices of the product sold.
Arch Coal, Inc - Earnings Surprise |
On a GAAP basis, the quarterly loss was 46 cents per share
versus a loss of 34 cents per share in the prior-year quarter.
Arch Coal's second-quarter total revenues of $713.8 million missed
the Zacks Consensus Estimate by 0.7% and also declined 6.8% from
$766.3 million in the year-ago quarter.
Both sales volume contraction and lower average sales price per ton
led to the year-over-year decline.
In the quarter under review, Arch Coal's sales volume declined 0.9%
year over year to 32.7 million tons. This can be attributed to
decreased sales contribution from the Powder River Basin and the
Appalachian region, which was partially offset by an increase in
sales at Bituminous Thermal operations.
In second-quarter 2014, total operating expenses declined 6.6% year
over year to $749.6 million on the back of cost control measures.
Net interest expenses in the reported quarter were $95.9 million,
2.6% higher than the prior year.
Cash and cash equivalents, as of Jun 30, 2014, were $740.2 million
versus $911.1 million as of Dec 31, 2013.
Long-term debt, as of Jun 30, 2014, fell to $5,116.4 million from
$5,118.0 million as of Dec 31, 2013.
Net cash (used)/ provided by operating activities in the first half
of 2014 was ($78.4) million compared with $52.1 million in the
Capital expenditure in the first half of 2014 was $95.8 million,
substantially lower than $168.1 million in the year-ago period.
Taking into account the downturn in metallurgical coal demand, Arch
Coal reduced its metallurgical sales guidance to the range of
6.3-6.9 million tons for 2014 from the previous range of 6.3-7.3
Taking into consideration the ongoing congestion in railroad
services, Arch Coal lowered its thermal sales guidance to the band
124-130 million tons in 2014 from the previous range of 124-132
Arch Coal also narrowed its 2014 capital expenditure to the range
of $170 million to $180 million from the previous range of $180
million to $190 million. The company decided to reduce its capital
outlay because of the soft coal market.
Other Coal Releases
Peabody Energy Corporation
) reported a loss per share of 28 cents in the second quarter 2014,
marginally wider than the Zacks Consensus Estimate of a loss of 27
CONSOL Energy Inc.
) reported pro forma earnings of 7 cents per share for the second
quarter of 2014, lagging the Zacks Consensus Estimate of 25 cents
Alliance Resource Partners LP
) reported second-quarter 2014 earnings of $1.37 per unit,
surpassing the Zacks Consensus Estimate of 98 cents.
The company's move to idle its Cumberland River complex in response
to weak global metallurgical coal prices is appreciable.
Higher drawing of coal inventories for power generation during the
cold winter months lowered the stockpiles of the utilities. As a
result, as utility operators will try to replenish their
stockpiles. We believe railroads services will play a vital role
here. If the congestion continues it will impact the prospects of
the coal miners.
Arch Coal currently has a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
ARCH COAL INC (ACI): Free Stock Analysis Report
CONSOL ENERGY (CNX): Free Stock Analysis Report
PEABODY ENERGY (BTU): Free Stock Analysis
ALLIANCE RES (ARLP): Free Stock Analysis Report
To read this article on Zacks.com click here.