Arch Coal Earnings: Here’s Why Investors Don’t Like These Results

Arch Coal Inc. (NYSE:ACI) had a loss and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.91%.

Arch Coal Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.29 in the quarter versus EPS of $-0.10 in the year-earlier quarter.

Revenue: Decreased 27.95% to $766.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Arch Coal Inc. reported adjusted EPS loss of $0.29 per share. By that measure, the company beat the mean analyst estimate of $-0.33. It missed the average revenue estimate of $920.49 million.

Quoting Management: “During the second quarter, we achieved a sequential improvement in our earnings as we continued to manage our business effectively in the face of weak coal market conditions,” said John W. Eaves, Arch’s president and chief executive officer. “Arch employed strong cost control, particularly in the Powder River Basin and in Appalachia, which positively impacted our per-ton margins. Our cost reduction initiatives are generating results, and we will continue to pursue aggressive cost reductions across all of our operations during the second half of the year.”

Key Stats (on next page)…

Revenue decreased 7.17% from $825.5 million in the previous quarter. EPS increased to $-0.29 in the quarter versus EPS of $-0.34 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a loss of $0.33 to a loss $0.34. For the current year, the average estimate has moved down from a loss of $1.31 to a loss of $1.39 over the last ninety days.

Stocks with improving earnings metrics are worthy of your extra attention. In fact, “E = Earnings Are Increasing Quarter-Over-Quarter” is a core component of our CHEAT SHEET investing framework for this very reason. Don’t waste another minute – click here and get our CHEAT SHEET stock picks now.

(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at]