ST. LOUIS (AP) — Arch Coal Inc. said Tuesday that its second-quarter loss widened partly because of nagging rail disruptions and weaker prices for coal used in making steel, though cost controls helped the coal producer’s latest earnings surpass analysts’ expectations.
The St. Louis-based company posted a loss of $96.9 million, or 46 cents per share, compared with a loss of $72.2 million, or 34 cents per share, in the same quarter a year earlier.
Losses, adjusted for one-time gains and costs, were 46 cents per share. The average estimate of analysts surveyed by Zacks Investment Research was for a loss of 48 cents per share.
The coal producer said revenue dropped 6.9 percent to $713.8 million from $766.3 million in the same quarter a year earlier, missing Wall Street forecasts of $718.5 million, according to Zacks.
Arch shares rose 15 cents, or 5.24 percent, to $3.01 in midday trading Tuesday. The company’s shares have decreased $1.59, or 36 percent, to $2.86 since the beginning of the year. The stock has fallen $1.26, or 31 percent, over the past 12 months.
Arch Coal announced last week that it was idling the Cumberland River operations in Virginia and Kentucky, eliminating more than 210 full-time positions and cutting its full-year metallurgical coal volumes by about 200,000 tons. Arch called the move necessary in responding to market challenges for steel-making coal, and that the company’s strategy is to shift its portfolio toward higher-margin, lower-cost metallurgical coal operations.
Arch Coal now expects to ship between 6.3 million and 6.9 million tons of metallurgical coal for 2014, down from 6.3 million to 7.3 million tons. Arch on Tuesday said it now expects 2014 sales of coal used by power plants to be 124 million to 130 million tons, down from 124 million to 132 million tons.
Arch also said it was reducing its capital expenditures for this year, now expecting to spend $170 million to $180 million for capital programs, including land and reserve additions.
“Through this cyclical downturn, we have been focused on controlling our costs and capital spending, and we have further reduced our capital outlay and administrative spending expectations for full year 2014,” John Drexler, Arch’s senior vice president and chief financial officer, said in a statement Tuesday.
“Looking ahead, we remain focused on those factors within our control to position Arch for a future market rebound,” added John Eaves, Arch’s president and chief executive officer.