Weak Coal Prices Produce Another Loss at Arch Coal
Coal producer Arch Coal issued fourth-quarter 2013 earnings results before the opening bell today, reporting a net loss for the eighth consecutive quarter. A weak coal pricing environment, along with rail service disruptions, helped to produce a loss of $371.1 million, or $1.75 per share. That was a bigger loss than analysts expected.
Included in the loss last quarter was a $265.4 million noncash goodwill impairment charge. When adjusting for that charge, as well as others the company took on the quarter, the adjusted loss is reduced to $95.1 million, or $0.45 per share. That was slightly more than the adjusted loss of $88.7 million, or $0.42 per share, the company reported in the fourth quarter of 2012.
Slumping coal prices resulted in Arch Coal's quarterly revenue plunging 17% from the prior-year period to just $719.4 million. Overall, the average sale price per ton of coal was weak in all four of its operating segments compared to 2012. The company reported a negative operating margin per ton in all segments except its bituminous thermal segment.
Looking ahead, Arch Coal plans to focus on what it can control: costs. Its goal for the year ahead, according to CEO John Eaves in a statement, is to "once again tighten our belts to reduce cash outflow and increase operational efficiencies." A press release said Arch Coal would continue to cut capital spending; the company dropped capital spending by nearly $100 million in 2013, to $297 million, and expects to spend less than $200 million on such projects this year. Eaves noted in the release that there are "signs that a rebound in U.S. thermal coal demand and pricing may be forthcoming," so the company is managing its operations in order to benefit when that rebound occurs.
The article Weak Coal Prices Produce Another Loss at Arch Coal originally appeared on Fool.com.Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.