TORONTO (miningweekly.com) – US coal-miner Arch Coal on Friday reported a third-quarter net income of $25,2-million, down from $97,8-million a year earlier but better than analysts had predicted.

On a per share basis, the company earned 16c a share, compared with average forecasts of 4c a share, according to Reuters.

Arch reported third-quarter coal sales of 29,1-million tons, lower than the 34,8-million tons it sold in the same period last year, but an increase on 27,4-million in the second quarter.

Earlier this month, the firm completed the acquisition of Rio Tinto's Jacobs Ranch mine, in the Powder River Basin.

The company estimates synergies from the transaction of between $45-million and $55-million a year, beginning in 2010, said CEO Stephen Leer.

“The acquisition of Jacobs Ranch will further expand our size, scale and strategic position in the Powder River Basin, the nation's largest, fastest growing and most cost-competitive coal supply region," he said.

"The integration of Jacobs Ranch into Black Thunder also creates what we believe to be the largest single coal-mining complex in the world, and further strengthens Arch's standing as a preferred, low-cost energy supplier to our nation's electric power generators."

The company increased its sales forecast for the year to between 121-million tons and 125-million tons of coal as a result of the acquisition.

It had lowered its guidance for the full year in July to between 114-million tons and 118-million tons.

"While we are seeing improvement in met markets and in the underlying global and domestic economies, high stockpiles at US generators will likely dampen steam coal markets in the first half of 2010," Leer said.

"Thus, we will continue to implement our company strategy of matching production levels to our expectations of market demand, which we believe is in the best interest of our shareholders.

“We will also retain the flexibility to respond to improving coal market fundamentals, which we believe will occur during the course of 2010 and 2011."