Arch Coal Inc Earnings Cheat Sheet: Profit Dips and Misses Estimates

Rising revenue was not enough for Arch Coal Inc (NYSE:ACI) as the industrial metals and minerals company saw profit fall in the third quarter. Arch Coal is a coal producer in the United States, that sells coal to power plants, steel mills, and industrial facilities.

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Arch Coal Inc Earnings Cheat Sheet for the Third Quarter

Results: Net income for the industrial metals and minerals company fell to $19.1 million (9 cents per share) vs. $46.7 million (29 cents per share) a year earlier. This is a decline of 59.1% from the year earlier quarter.

Revenue: Rose 37% to $1.2 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: ACI reported adjusted net income of 8 cents per share. By that measure, the company fell short of mean estimate of 15 cents per share. Analysts were expecting revenue of $1.22 billion.

Quoting Management: “As previously announced, our third quarter financial results reflect lower Powder River Basin shipments versus a year ago due to the impact of Midwestern flooding on rail service, as well as reduced profitability at our Mountain Laurel operation in Appalachia as a result of geologic challenges,” said Steven F. Leer, Arch’s chairman and chief executive officer. “Even with these temporary hurdles, Arch’s quarterly EBITDA expanded year-over-year on higher metallurgical coal shipments and better metallurgical coal pricing.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 29.2%, with the biggest boost coming in the third quarter of the last fiscal year when revenue rose 42.2% from the year earlier quarter.

The company has now fallen short of estimates in the last two quarters. In the second quarter, it missed expectations by 18 cents with net income of 44 cents versus a mean estimate of net income of 62 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 78 cents a share to 37 cents over the last ninety days. At $1.26 per share, the average estimate for the fiscal year has fallen from $2.41 ninety days ago.

Competitors to Watch: Peabody Energy Corporation (NYSE:BTU), CONSOL Energy Inc. (NYSE:CNX), Patriot Coal Corporation (NYSE:PCX), Massey Energy Company (NYSE:MEE), Alpha Natural Resources, Inc. (NYSE:ANR), Alliance Holdings GP, L.P. (NASDAQ:AHGP), Intl. Coal Group, Inc. (NYSE:ICO), James River Coal Company (NASDAQ:JRCC), Natural Resource Partners LP (NYSE:NRP), and Alliance Resource Partners, L.P. (NASDAQ:ARLP).

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(Source: Xignite Financials)