Arch Coal Earnings: Here’s Why the Stock is Falling Now

Arch Coal Inc. (NYSE:ACI) had a loss and met Wall Street’s expectations, AND 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 6%.

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Arch Coal Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-0.34 in the quarter versus EPS of $-0.04 in the year-earlier quarter.

Revenue: Decreased 20.6% to $825.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Arch Coal Inc. reported adjusted EPS loss of $0.34 per share. By that measure, the company missed the mean analyst estimate of $-0.34. It missed the average revenue estimate of $913.24 million.

Quoting Management: “Despite the global coal market headwinds that have prevailed over the last 18 months, we are delivering strong cost control, exercising capital restraint and minimizing cash outflows in the trough of the market cycle, while maintaining our commitment to safety and environmental excellence,” said John W. Eaves, Arch’s president and chief executive officer. “As the market cycle turns, we are confident that our low-cost operations will generate strong cash flows and value for our shareholders.”

Key Stats (on next page)…

Revenue decreased 14.74% from $968.23 million in the previous quarter. EPS decreased to $-0.34 in the quarter versus EPS of $-0.14 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 $0.25 to a loss $0.32. For the current year, the average estimate has moved down from a loss of $0.85 to a loss of $1.21 over the last ninety days.

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

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