WASHINGTON (dpa-AFX) - Arch Coal Inc. (ACI) on Friday reported a rise in profit for the fourth quarter, aided by higher sales prices and the addition of some acquired operations. However, adjusted earnings and revenue missed Wall Street estimates.
Net income attributable to the company for the quarter climbed to $70.9 million or $0.33 per share from $47.8 million or $0.29 per share in the prior-year period.
Arch completed the $3.5 billion acquisition of International Coal Group or ICG in last June, thus becoming the second largest U.S. metallurgical coal producer.
Excluding acquisition-related costs associated with this purchase and non-cash amortization of acquired coal supply deals, earnings were $0.29 per share, compared to last year's $0.33 per share. On average, 24 analysts polled by Thomson Reuters expected earnings per share of $0.32 for the quarter. Analysts' estimates typically exclude one-time items.
Revenues climbed 47 percent to $1.23 billion from $835.39 million in the earlier year quarter, helped by higher sales prices and the addition of the former ICG operations. Analysts estimated revenues of $1.30 billion for the quarter.
Net income attributable to the company for the year decreased to $141.68 million or $0.74 per share from $158.86 million or $0.97 per share last year. Adjusted net income was $205.2 million or $1.07 per share. Full year revenues increased to $4.29 billion from $3.19 billion. Wall Street expected earnings of $1.17 per share on revenues of $4.35 billion.
Looking ahead, Steven Leer, Arch's chairman and CEO, said, '...near-term market conditions have softened and we are reducing our planned production volumes to better align with weak generation and coal demand trends. These actions preserve our reserve base and increase our flexibility to respond as global and domestic energy markets evolve.'
The company expects that pricing in metallurgical coal markets could strengthen in following quarters as global steel capacity utilization increases and the pace of economic activity improves globally along with the resurfacing of coal supply disruptions.
Further, Arch said it is reducing its planned capital expenditures by targeting a lower level of spend for some of its thermal assets.
ACI closed on Thursday at $15.58, up from the prior close of $15.17, on a volume of 10 million shares. The stock is down 3.7 percent in pre-market trading.
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