Why Arch Coal's Share Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of coal miner Arch Coal (NYSE: ACI  ) jumped 10% today, after reporting earnings.

So what: Revenue fell 9% in the third quarter, to $1.09 million, but was ahead of estimates of $1.01. The company also reported a surprise profit of $45.8 million, or $0.22 per share, when analysts expected a $0.16 loss. 

Now what: This could be a sign that coal stocks are starting to bottom because of fundamental improvement. Prices are starting to stabilize, and even rise slightly, and demand is expected to improve. I don't think this is a reason to buy coal stocks due to long-term challenges in the industry, but I'm not as negative on the industry as I was earlier this year given how far they've fallen.

Interested in more info on Arch Coal? Add it to your watchlist by clicking here.


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  • Report this Comment On October 26, 2012, at 9:43 PM, Paulson545 wrote:

    It's going to snow next week. The Wall Street Transcript stated that N Gas and the Energy Stocks are in a 3 year up trend. Coal stocks are why over sold. imo when the snow starts falling coal stocks will start raising...

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