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Arch Coal (ARCH) Misses on Q1 Earnings, Lowers '18 Guidance

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Arch Coal Inc. (ARCH - Free Report) reported first-quarter 2018 operating earnings of $2.95 per share, missing the Zacks Consensus Estimate of $4.00 by 26.25%.

The company reported GAAP earnings of $2.74 per share compared with $2.03 in the year ago quarter. The difference between GAAP and Operating earnings in the reported quarter is due to some one-time charges adding up to 21 cents.  

Total Revenues

Total revenues in the reported quarter were $575.3 million, which lagged the Zacks Consensus Estimate of $577 million. The quarterly revenues reflects a year-over-year decline of 4.3%.

Arch Coal Inc. Price, Consensus and EPS Surprise

 

Arch Coal Inc. Price, Consensus and EPS Surprise | Arch Coal Inc. Quote

Segment Details

In the Metallurgical segment, the company sold 1.8 million tons of coal compared with 2.1 million tons in the first quarter of 2017. Arch Coal recorded cash margins of $47.64 per ton compared with $33.17 in the year-ago quarter due to improvement in selling price of metallurgical coal.

During the first quarter, Powder River Basin segment’s cash margin per ton declined nearly 38.4% year over year, due to the roll-off of higher-priced legacy sales contract The company sold 19.7 million tons, down from 21.3 million tons in the year-ago quarter.

Cash cost per ton in Other Thermal segment increased 19.8% from the last reported quarter due to lower volume levels from the low-cost West Elk mine and increased maintenance expense at the Coal-Mac operation. As a consequence, the company posted a cash margin of $7.06 per ton compared with $11.69 per ton in the year-ago quarter.

Financial Highlights

Cash and cash equivalents as of Mar 31, 2018 were $288.3 million compared with $273.3 million at the end of 2017.

Long-term debt as of Mar 31, 2018 was $307.7 million compared with $310.1 million at the end of 2017.

Cash provided from operating activities as of Mar 31, 2018 were $66.8 million compared with $125.5 million in the year-ago period.

Arch Coal returned nearly $8.3 million to shareholders through cash dividends during the first quarter of 2018.

Guidance

Arch Coal expects total 2018 coal sales volume between 86.3 million and 90.7 million tons, out of which thermal coal sales volumes are expected within 80-84 million tons and coking coal in the range of 6.3-6.7million tons. The new guidance is lower than the previous range of 92.4-99 million tons.

Zacks Rank

Arch Coal has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 Peer Release

Cloud Peak Energy (CLD - Free Report) reported a loss of 10 cents in first-quarter 2018, wider than the Zacks Consensus Estimate of a loss of 8 cents per share.

 Upcoming Peer Releases

Alliance Resource Partners, L.P. (ARLP - Free Report) a Zacks Rank #3 stock is expected to report first quarter earnings on Apr 30. The Zacks Consensus Estimate is currently pegged at 56 cents.

 CONSOL Coal Resources LP (CCR - Free Report) a Zacks Rank #3 stock is expected to report first quarter earnings on May 3. The Zacks Consensus Estimate is currently pegged at 43 cents.

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