Arch Coal 2nd-Quarter Profit Soarsadmin
Coal producer Arch Coal Inc. said Friday its second-quarter profit soared because of better contract terms and a restructuring and the company forecast strong demand for coal going forward.
Net income in the quarter jumped to $69.6 million, or 48 cents per share, from $1.7 million or a penny per share, in the prior-year period. Income from operations leaped to $99.8 million versus $21.5 million last year.
Arch saw higher sales prices in most of its operating basins and a substantial increase in its average per-ton operating margin due to the roll-off of lower-priced sales contracts and the restructuring of its Central Appalachian assets. The company operates mines in Wyoming, Colorado, Utah, West Virginia, Kentucky and Virginia.
Revenue edged up 0.6 percent to $637.5 million compared to $633.8 million during the same period last year, reflecting the divestiture of parts of its Central Appalachia division in December.
Analysts, on average, were looking for earnings of 43 cents per share on sales of $627.9 million.
“We continue to expect strong domestic and global demand growth for coal, coupled with supply pressures in the Appalachian basins, to exert a positive influence on coal pricing in coming years,” Chairman and Chief Executive Steven F. Leer said in a statement.
The company said a healthy U.S. economy, the rising cost of competing fuels, increased coal usage in China and India and steadily surging oil prices are all benefiting the coal industry.
Arch maintained its full-year earnings outlook in a range of $1.87 per share to $2.12 per share.
Analysts are expecting full-year earnings of $2.05 per share.
Arch shares gained 70 cents, or 2 percent, to $35 in electronic premarket trading.
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