| Arch Coal Rises on Higher Revenues Despite Wider Q4 Loss - Analyst Blog | |
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St. Louis, MO based Arch Coal Inc. (ACI) reported fourth-quarter 2014 adjusted loss of $1.09 per share, much wider than the Zacks Consensus Estimate of a loss of 38 cents and the year-ago loss of 45 cents per share.
For 2014, Arch Coal incurred a loss of $2.60 per share, wider than the Zacks Consensus Estimate of a loss of $1.90 and $1.08 per share loss reported in 2013. Arch Coal Inc. - Earnings Surprise | FindTheBest Following the earnings announcement, share prices of Arch Coal showed a northward movement of 16.3% on higher revenues.
Total Revenue
Arch Coal’s fourth-quarter total revenues of $745.2 million surpassed the Zacks Consensus Estimate of $721 million by 3.4% and also increased 3.6% from $719.4 million in the year-ago quarter.
Revenues increased on account of sales volume expansion, partially offset up by lower average sales price per ton.
Revenues for the full year came in at $2.937.1 million, a tad higher than the Zacks Consensus Estimate of $2,931 million. Revenues for 2014 however declined 2.6% from $3,014.4 million generated in 2013.
Operational Update
In the quarter under review, Arch Coal’s sales volume escalated 9% year over year to 35.2 million tons. This can be attributed to increased sales contribution from the Powder River Basin and Appalachian region, partially offset by a decrease in sales at the Bituminous Thermal operations.
Average sales price per ton sold in the quarter decreased a marginal 0.5% to $19.82 from $19.91 in the fourth quarter of 2013.
In the fourth quarter 2014, total operating expenses declined a substantial 29.2% year over year to $750.5 million on the back of cost control measures and the absence any goodwill impairment charge in the reported quarter.
Net interest expenses in the reported quarter were $96.4 million, 2.6% higher than the prior-year period.
Financial Update
Cash and cash equivalents, as of Dec 31, 2014, were $734.2 million compared with $911.1 million as of Dec 31, 2013.
Long-term debt, as of Dec 31, 2014, was $5,123.5 million compared with $5,118.0 million as of Dec 31, 2013.
Capital expenditure in 2014 was $147.3 million, substantially lower than $297 million incurred in 2013.
2015 Guidance
Arch Coal provided metallurgical sales guidance for 2015 in the range of 6.3–7.0 million tons. Thermal sales are expected in the band of 124–136 million tons in 2015.
Arch Coal projects capital expenditure in the range of $145 million to $160 million. The company has decided to reduce its capital outlay because of the soft coal market.
Other Coal Releases
CONSOL Energy Inc. (CNX) reported pro forma earnings of 25 cents per share for the fourth quarter of 2014, beating the Zacks Consensus Estimate of 20 cents by 25%.
Alliance Resource Partners LP (ARLP) reported fourth-quarter 2014 earnings of $1.18 per unit lagging the Zacks Consensus Estimate of $1.19 by a penny.
Peabody Energy Corp. (BTU) reported a loss of $1.21 per share in the fourth-quarter 2014, much wider than the Zacks Consensus Estimate of a loss of 36 cents.
Our View
Even though Arch Coal’s loss in the fourth quarter was much wider than our estimate, it managed to beat on the top line. Revenues also climbed year over year on account of higher volumes sold.
The company’s efforts to restructure its asset portfolio by way of divesting non-strategic assets and ramping up production at the low-cost Leer mine in Appalachia led to a decline in operational costs.
Arch Coal also divulged its plans to suspend dividends on its common stock in order to safeguard its financial position. This will allow the coal miner to invest in high-quality assets and ultimately maximize shareholder value.
Going forward, the company might witness a trade-off between environmental regulations discouraging power generation from coal and a rise in metallurgical coal demand owing to a projected increase in the European steel sector.
Arch Coal currently carries a Zacks Rank #4 (Sell). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CONSOL ENERGY (CNX): Free Stock Analysis Report ARCH COAL INC (ACI): Free Stock Analysis Report PEABODY ENERGY (BTU): Free Stock Analysis Report ALLIANCE RES (ARLP): Free Stock Analysis Report To read this article on Zacks.com click here.
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Consol Energy Inc.
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PRODUCER |
CODE : CNX |
ISIN : US20854P1093 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Consol Energy is a producing company based in United states of america. Consol Energy produces coal in USA, and holds various exploration projects in USA. Its main asset in production is BUCHANAN in USA. Consol Energy is listed in Germany and in United States of America. Its market capitalisation is US$ 5.4 billions as of today (€ 5.0 billions). Its stock quote reached its highest recent level on June 06, 2008 at US$ 99.79, and its lowest recent point on April 26, 2019 at US$ 10.00. Consol Energy has 223 758 284 shares outstanding. |