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Will Arch Coal Finally Rebound This Quarter?

Dan Caplinger
April 19, 2013

Next Tuesday, Arch Coal (NYSE: ACI) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed, knee-jerk reaction to news that turns out to be exactly the wrong move.

Arch Coal has suffered along with the rest of the coal industry as low prices have made it extremely difficult for coal miners to remain profitable. But will rising prices elsewhere in the energy industry finally help the company rebound? Let's take an early look at what's been happening with Arch Coal over the past quarter and what we're likely to see in its quarterly report.

Stats on Arch Coal



Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$912.03 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

How will Arch Coal fare this quarter?
Analysts have remained pessimistic in recent months about Arch Coal's earnings prospects, as they've widened their loss estimates for the just-finished quarter by $0.04 per share and now expect full-year 2013 to come in with earnings that are $0.36 per share worse than they believed three months ago. The stock has struggled as well, losing more than a quarter of its value since mid-January.

Arch Coal and its peers have all struggled due to low natural gas prices. With many former coal users in the U.S. having switched to natural gas for cost and environmental reasons, coal companies have seen big sales volume declines domestically. In particular, Arch and Alpha Natural Resources (NYSE: ANR), both of which have extensive operations in the Appalachian region, had to stop production at several mines in order to cut costs. Even with natural gas prices finally starting to rise somewhat, coal has a long way to go before it will return to its former popularity within the U.S. -- if ever.

Fortunately for Arch, natural gas isn't nearly as cheap internationally, and so the company has looked to international markets to sell its c