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Last Update: 05-Feb-13 11:23 ET
Arch Coal (ACI) Down 7.5% Following Earnings Results
Arch coal (ACI $6.40 -0.53) reports Q4 (Dec) loss of $0.42 per share, excluding non-recurring items, $0.28 worse than the Capital IQ Consensus Estimate of ($0.14); revenues fell 21.2% year/year to $968 mln vs the $997.19 mln consensus.
Arch continued to successfully execute its operational strategy and made progress on a number of fronts in Q4 while weathering challenging coal market conditions. Our Western Bituminous Region delivered a record cash margin performance, and our other regions generated positive cash flow even while running at significantly reduced volume levels. In addition, we shipped 3 mln tons overseas in Q4 , capping a record year for company exports."
Fourth quarter sales price declined $0.67 per ton versus Q3, in part due to lower prices on export sales. Cash costs increased $0.66 per ton over the same time period, mainly reflecting anticipated higher maintenance expense. Arch has established production targets for 2013, and expects sales from company-controlled operations of between 133 mln and 144 mln tons for the full year. Included in this range are projected sales of 8-9 mln tons of metallurgical coal. At expected volume levels, Arch is nearly 90% committed on thermal sales for 2013. Given the below-capacity production levels set for 2013, Arch currently anticipates that cash costs per ton in each of its operating regions will be similar to 2012 levels.
"On the thermal side of our business, we have layered in some sales to run our mines efficiently in 2013, but have elected to continue operating at reduced volume levels at this time. We have also maintained some sales leverage where we believe opportunities will present themselves over the course of 2013. On the metallurgical side, we have strong commitments from our North American customer base, and we have some of our higher-quality coals still available to capture potential upside in an improving seaborne marketplace."
"We expect 2013 to be a rebalancing year for global and domestic coal markets, and our current guidance range reflects this assumption. Coal price increases are likely to follow what we expect will be improving coal supply and demand trends. As such, we believe our performance in the second half of 2013 is likely to be stronger than in the first half."
Arch continued to successfully execute its operational strategy and made progress on a number of fronts in Q4 while weathering challenging coal market conditions. Our Western Bituminous Region delivered a record cash margin performance, and our other regions generated positive cash flow even while running at significantly reduced volume levels. In addition, we shipped 3 mln tons overseas in Q4 , capping a record year for company exports."
Fourth quarter sales price declined $0.67 per ton versus Q3, in part due to lower prices on export sales. Cash costs increased $0.66 per ton over the same time period, mainly reflecting anticipated higher maintenance expense. Arch has established production targets for 2013, and expects sales from company-controlled operations of between 133 mln and 144 mln tons for the full year. Included in this range are projected sales of 8-9 mln tons of metallurgical coal. At expected volume levels, Arch is nearly 90% committed on thermal sales for 2013. Given the below-capacity production levels set for 2013, Arch currently anticipates that cash costs per ton in each of its operating regions will be similar to 2012 levels.
"On the thermal side of our business, we have layered in some sales to run our mines efficiently in 2013, but have elected to continue operating at reduced volume levels at this time. We have also maintained some sales leverage where we believe opportunities will present themselves over the course of 2013. On the metallurgical side, we have strong commitments from our North American customer base, and we have some of our higher-quality coals still available to capture potential upside in an improving seaborne marketplace."
"We expect 2013 to be a rebalancing year for global and domestic coal markets, and our current guidance range reflects this assumption. Coal price increases are likely to follow what we expect will be improving coal supply and demand trends. As such, we believe our performance in the second half of 2013 is likely to be stronger than in the first half."
