Arch Coal's (ARCH) Q3 Earnings And Revenues Beat Estimates

Arch Coal Inc. price-consensus-eps-surprise-chart | Arch Coal Inc. Quote

Segment Details

In the Metallurgical segment, the company sold 2.1 million tons of coal compared with the prior-year figure of 1.9 million tons. It recorded cash margins of $34 per ton compared with $42.21 in the year-ago quarter, owing to lower sales price.

During the quarter, the Powder River Basin segment’s cash margin per ton decreased by a penny on a year-over-year basis to $2.25. The company sold 22.2 million tons, up from the year-ago figure of 21.5 million tons.

In the Other Thermal segment, its cash margin was $8.36 per ton, down 9.9% from $9.28 in the year-ago quarter. Shipment also declined 20% year over year to 2 million tons.

Highlights of the Release

During the quarter, the company entered into an agreement to acquire 20 million tons of low-cost, high-quality, High-Vol A coking coal reserves directly adjacent to the Leer mine for a purchase price of $52.5 million. This agreement will increase Arch Coal’s High-Vol A reserves at the Leer mine by 24 million tons at a cost of around $2.50 per ton.

During the quarter, the company repurchased 1,170,000 shares of common stock, representing 4.7% of initial shares outstanding, at a total investment of $91.4 million. In the last 10 quarters, Arch Coal invested a total of $816.9 million to buy back 10 million shares.

Financial Highlights

Cash and cash equivalents as of Sep 30, 2019 were $175.4 million compared with $264.9 million at the end of 2018.

Long-term debt as of Sep 30, 2019 was $292.8 million compared with $300.2 million at the end of 2018.

Cash provided from operating activities in the first nine months of 2019 was $334.1 million compared with $266.1 million in the comparable year-ago period.

Guidance

Arch Coal reiterated its view for coking coal volume for 2019 in the range of 6.7-7.1 million tons and total sales volume within 86.7-92.1 million tons.

Zacks Rank

Arch Coal currently holds a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Peabody Energy (NYSE:BTU) is scheduled to report third-quarter 2019 results on Oct 29. The Zacks Consensus Estimate for loss for the quarter to be reported is pegged at 41 cents per share.

CONSOL Energy Inc (NYSE:CNX). (NYSE:CEIX) is slated to report third-quarter 2019 results on Nov 5. The Zacks Consensus Estimate for earnings for the to-be-reported quarter is pegged at 50 cents per share.

CONSOL Coal Resources LP (NYSE:CCR) is scheduled to announce third-quarter 2019 results on Nov 5. The Zacks Consensus Estimate for earnings for the quarter is pegged at 36 cents per share.

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