Arch Coal Inc (NYSE:ACI) Reports Bigger Than Expected Loss


Dallas, Texas 04/25/2014 (FINANCIALSTRENDS) – Arch Coal Inc (NYSE:ACI) reported a bigger than expected loss in its first quarter 2014 earnings report. ACI reported a net loss of $124.1 million, or $0.59 per diluted share for the quarter. The adjusted net loss was $126.5 million, or $0.60 per diluted share.

Comparing Quarters, Year-on-Year

It’s a bigger than expected loss for one of the world’s largest coal producers. The $124.1 million, or $0.59 per diluted share, loss is a lot bigger than the $0.44 loss analysts were expecting. It’s also bigger than the loss the company racked up in the first quarter last year, when it reported a loss of $70.5 million, or $0.33 cents per share.

The sticker shock impact of the loss led to a stampeded for the exits on Wall Street, with ACI dropping 8% by the close of the day’s trading after the announcement.

Revenues for the quarter were pegged at $736 million, with adjusted EBITDA of $27.6 million, as compared to $737.4 in revenue and EBITDA of $83.6 million for the first quarter last year.

Statement by Arch Coal Inc CEO

Arch Coal Inc President and CEO John W. Eaves said that, “As expected, our first quarter results reflect a challenging global metallurgical coal market and the impact of rail performance issues.”

Eaves added that they are taking proactive measures for managing controllable costs and capital spending, to reduce cash outflow and preserve liquidity.

Not to put too fine a point on it, but the company’s finances are sound enough. As of March 31, 2014, ACI had $1.1 billion in cash and short-term investments, with a total liquidity position of $1.4 billion.

Eaves added that they are “encouraged by the strengthening dynamics in the U.S. thermal market. Positive electric generation and coal demand trends to date, declining U.S. coal generator stockpiles and higher competing fuel prices should provide the catalyst for improvement in our domestic thermal coal operations during 2014.”

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