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Arch Coal Goes Negative

By Seth Jayson - Updated Apr 10, 2017 at 1:42PM

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Just the facts, Fool.

Arch Coal (NYSE: ACI) reported earnings on April 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Arch Coal whiffed on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP loss per share expanded. GAAP earnings per share contracted to a loss.

Margins dropped across the board.

Revenue details
Arch Coal tallied revenue of $825.5 million. The 12 analysts polled by S&P Capital IQ wanted to see a top line of $925.0 million on the same basis. GAAP reported sales were 21% lower than the prior-year quarter's $1.04 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.34. The 24 earnings estimates compiled by S&P Capital IQ predicted -$0.33 per share. Non-GAAP EPS were -$0.34 for Q1 against -$0.04 per share for the prior-year quarter. GAAP EPS were -$0.33 for Q1 compared to $0.01 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 13.9%, 430 basis points worse than the prior-year quarter. Operating margin was -3.8%, 900 basis points worse than the prior-year quarter. Net margin was -8.5%, 860 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $940.2 million. On the bottom line, the average EPS estimate is -$0.31.

Next year's average estimate for revenue is $3.81 billion. The average EPS estimate is -$1.15.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,473 members out of 1,550 rating the stock outperform, and 77 members rating it underperform. Among 281 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 265 give Arch Coal a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Arch Coal is hold, with an average price target of $7.28.

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