Arch Coal Moves On Q2 Earnings (ACI)

Shares of Arch Coal ACI moved up pre-market after the company reported second quarter earnings. EPS beat the analyst consensus by 12 percent, coming in at a $0.29 loss, while revenue missed by almost 17 percent to land at $766.3 million.

Year over year revenue is down 20.6 percent while net income is up 83.4 percent. In their annual report, the company cites weakness in the coal market for revenue loss. Part of the surge in income resulted from a huge drop in the asset impairment and mine closures expense.

CEO John Eaves said, "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.”

Related: Arch Coal to Divest Non-Core Utah Operations to Bowie Resources for $435M in Cash

Arch comment on the agreement to sell its subsidiary, Canyon Fuel Company, for $435 million. The sale will help the company focus on its core business while providing a pretax gain of $120 million.

Looking forward, the company reduced its expected metallurgical coal shipments to the range of 7.7 to 8.3 million tons. Eaves commented, “We will continue to focus on the things we can control during the downturn, while carefully positioning ourselves for the market rebound.”

Shares of Arch Coal are down 2.9 percent on the market open to $4.00. The company will be hosting a call to discuss its earnings at 10 am EDT, Tuesday. More details can be found on their website.