Arch Coal surprised the Street, posting a profit in Q3 as cost cuts paid off and thermal coal shipments improved. The company’s Q3 profit improved five-fold, while revenue fell by 9%. Recurring earnings came in at $0.20 per share while analysts were expecting a loss of $0.16. It shipped 37.5 million tons of coal in the third quarter, up from 19% in Q2.
CEO Jon Eaves said, “Global coal markets are in the process of correcting, with the domestic thermal market building some momentum while metallurgical markets are bottoming out.”
Arch said it was matching production levels to demand, reducing costs and lower capital spending to help offset the impact of weak prices. It now expects capital spending to be $350 million in 2013, roughly 15% below estimated 2012 capital spending of $410 million to $430 million.
Arch Coal (ACI : NYSE : US$8.07), Net Change: 0.76, % Change: 10.33%, Volume: 42,341,464