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Arch Coal Inc (NYSE:ACI) Shares Edge Up Pre-Market on Narrower-Than-Expected Q2 Loss

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By on Energy & Solar

Arch Coal Inc (NYSE:ACI) shares edged higher pre-market Tuesday after the coal producer reported a narrower-than-expected Q2 net loss, even as revenue came in slightly below expectations and the company cut its 2014 targets for sales volume and capital spending.

The company reported a net loss for the latest quarter of $96.9 million, or $0.46 per diluted share, compared with a prior-year net loss of $72.2 million, or $0.34 per diluted share. Adjusted for one-time items, the prior-year loss was $0.29 per share. Analysts were expecting a loss of $0.49 per share for the latest quarter. Revenue fell 6.9% to $713.8 million, slightly below analysts’ mean estimate of $716 million.

Chief Operating Officer Paul A. Lang said the company expects “strong cost performances in our Appalachian and Bituminous Thermal segments to continue, and we plan to remain nimble in response to market conditions.”

The company reduced the high end of its sales volume targets for 2014, reflecting “the result of ongoing transportation bottlenecks affecting thermal coal deliveries and the impact of metallurgical production curtailments.”

Arch now expects thermal sales volumes for 2014 to be in the range of 124 million to 130 million tons, compared with its prior forecast of 124 million to 132 million tons. For metallurgical coal sales, it now expects to ship between 6.3 million and 6.9 million tons for 2014, down from its prior view for 6.3 million and 7.3 million tons.

Offsetting the volume reductions, Arch also cut its annual cash-cost-per-ton guidance range for both its Appalachian and Bituminous Thermal segments. However, it also “anticipates the timing of two longwall moves in West Virginia and the cost of idling Cumberland River to temporarily impact the Appalachian reported costs during the third quarter.”

In addition, Arch said it is further reducing its capital expenditures for 2014, and now expects to spend $170 million to $180 million for capital programs, inclusive of land and reserve additions. In April, the company targeted 2014 capital spending from $180 million to $190 million.

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