TORONTO (miningweekly.com) – US miner Arch Coal on Tuesday reported a bigger-than-expected loss, but also higher-than-expected revenue, for the third quarter, as higher coal prices buoyed results.
The St Louis, Missouri-based miner, which produces both electricity-generating thermal coal and steelmaking metallurgical coal from its diversified operations in every significant US coal basin, narrowed its net loss for the three months ended September 30, to $97.2-million, or $0.46 a share, compared with a loss of $128-million, or $0.61 a share, a year earlier.
The adjusted loss was $0.45 a share, more than the average Wall Street expectation of $0.41 a share.
However, despite revenue for the period being down 6.2% at $742.2-million, it beat average analyst expectations of $719.33-million.
Arch reported consolidated coal sales of 35.1-million tons, down 2% from 37.2-million tons in the same period a year earlier. However, the average realised price rose to $19.97/t, up from $18.93/t. Consolidated margins in the third quarter dropped from $7/t in the prior quarter, to $2.35/t in the quarter under review.
The company achieved a 24% quarter-on-quarter rise in cash margin per ton in the Powder River basin and a 7% quarter-on-quarter increase in its bituminous thermal segment. This helped to offset the lower cash margin per ton in Appalachia in the third quarter, which stemmed from the impact of two scheduled longwall moves and costs associated with the idling of the Cumberland River operation.
Arch retained its full-year production guidance at 124-million to 130-million tons of thermal coal sales and 6.3-million to 6.9-million tons of metallurgical coal sales. Cash costs at its Appalachian mines were expected to be higher than the price received for a ton of thermal coal; however, the region’s metallurgical coal price would more than make up the difference.
“Our western thermal operations improved cash margins per ton versus the second quarter owing to higher shipment levels, higher price realisations and continued strong cost control.
“Looking ahead, we expect our western thermal operations, particularly in the Powder River basin, to benefit from incrementally improving rail services in the fourth quarter of 2014 and in 2015,” Arch president and CEO John Eaves said.
Arch Coal’s NYSE-listed stock on Tuesday gained 7.82% to close at $1.93 a share, having lost 61.51% in value since the start of the year.