Why Arch Coal Dropped Like a Rock

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  ) fell 12% today after reporting earnings.

So what: Fourth0quarter revenue fell 21% to $968.2 million, still below the $999.2 million analysts expected. The company lost $295.4 million, or $1.39 per share, but when adjusted for one-time items the loss falls to $0.42, still below the $0.17 Wall Street expected.  

Now what: Regular readers know that I haven't been a fan of coal stocks for some time, and this is exactly why. Low-cost natural gas is fighting coal domestically, countries like China are mining their own coal as fast as they can, and even metallurgical coal has seen a drop in prices. I don't see any reason to get bullish now, and the better question might be, How long can Arch Coal survive?

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


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