Arch Coal Inc Third Quarter Earnings Sneak Peek

Arch Coal Inc (NYSE:ACI) will unveil its latest earnings on Friday, October 26, 2012. Arch Coal is a coal producer in the United States, that sells coal to power plants, steel mills, and industrial facilities.

Arch Coal Inc Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for a loss of 14 cents per share, up from profit of 8 cents in the year-earlier quarter. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting net loss of 46 cents per share, a swing from net income of $1.07 last year.

Past Earnings Performance: Last quarter, the company topped expectations by 8 cents, coming in at a loss of 10 cents per share versus a mean estimate of net loss of 18 cents per share. This followed two straight quarters of missing estimates.

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A Look Back: In the second quarter, the company swung to a loss of $435.5 million ($2.05 a share) from a profit of $11.1 million (6 cents) a year earlier, but beat analyst expectations. Revenue rose 8% to $1.06 billion from $985.1 million.

Stock Price Performance: Between August 24, 2012 and October 22, 2012, the stock price had risen $1.83 (27.8%), from $6.58 to $8.41. The stock price saw one of its best stretches over the last year between June 26, 2012 and July 3, 2012, when shares rose for six straight days, increasing 32.6% (+$1.81) over that span.

Wall St. Revenue Expectations: Analysts predict a decline of 15% in revenue from the year-earlier quarter to $1.02 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 37% in the third quarter of the last fiscal year, 47.1% in the fourth quarter of the last fiscal year and 19.1% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With nine analysts rating the stock as a buy, four rating it as a sell and eight rating it as a hold, there are indications of a bullish outlook.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.97 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company improved this liquidity measure from 1.55 in the first quarter to the last quarter driven in part by an increase in current assets. Current assets increased 33% to $1.57 billion while liabilities rose by 4.3% to $795.8 million.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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