If Arch Coal (NYSE: ACI) misses estimates again it will be the consecutive quarter for the company. The company will unveil its latest earnings on Friday, July 29. Arch Coal is a coal producer in the United States, which sells coal to power plants, steel mills and industrial facilities.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Arch Coal as a buy. But with 59.1% of analysts rating it a buy, Arch Coal is still below the mean analyst rating of its nearest 10 competitors, which average 62.3% buys. Analysts don't like Arch Coal as much as competitor Alpha Natural Resources overall. Thirteen out of 17 analysts rate Alpha Natural Resources a buy, compared to 13 of 22 for Arch Coal. Analysts still rate the stock a Moderate buy, but they are a bit more wary about it compared to three months ago.
  • Revenue Forecasts: On average, analysts predict $955.6 million in revenue this quarter. That would represent a rise of 25% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.63 per share. Estimates range from $0.50 to $0.89.

What our community says:
CAPS All-Stars are solidly backing the stock with 98% assigning it an "outperform" rating. The community at large agrees with the All-Stars with 96.2% awarding it a rating of "outperform." Fools are keen on Arch Coal and haven't been shy with their opinions lately, logging 421 posts in the past 30 days. Even with a robust four out of five stars, Arch Coal's CAPS rating falls a little short of the community's upbeat outlook.

The company boosted its gross margin by 2.5 percentage points in the last quarter. Revenue rose 22.6% while cost of sales rose 18.7% to $653.7 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

Quarter Q1 Q4 Q3 Q2
Gross Margin 25.1% 25.5% 25.5% 25.3%
Operating Margin 11.7% 10.4% 11.2% 13.9%
Net Margin 6.4% 5.7% 5.3% 8.7%

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