Sunday, July 29, 2012

Arch Coal Inc (NYSE:ACI) Posted Biggest Intra Day Gain In Last One Year

Arch Coal Inc (NYSE:ACI) shares jumped the most in any single day at least in the past one year with a gain of 29.28% after reporting an impressive operating margin growth of 13% as against the first quarter operating margin of 6.45%.

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The coal producer had reported a record export shipment of 7 million tons in the six month period ended June 30 2012; making the revenue for the six month period jump 13.166% as compared to the yoy revenue of $1.86 billion. Second quarter revenues showed growth of 8% at $1.1 billion while the Company had experienced a decline of 14% in the sales volume when compared to the second quarter 2011 sales volume and revenue of $0.986 billion.

The Company had successfully implemented its various cost reduction initiatives which helped Arch to increase its consolidated operating profit per ton to $1.87 as compared to per ton operating profit of $1.66 reported in the first quarter of 2012.

The Company incurred net loss of $435.5 million as compared to net income of $6.312 million in the last quarter as the Company had undergone various changes in its operations and assets to bring its cost under control. Adjusted net income was a loss of $22.12 million or $0.10 per share which excludes: Mine closure and asset impairment costs of $2.48 per share, goodwill impairment of $0.55 per share, other non operating expenses of $0.09 per share and tax adjustments on the aforementioned adjusting items was $1.15 per share.

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Arch completed the quarter with $513 million as cash in hand and liquidity position of approximately $860 million. During the quarter Arch had issued a $1.4 billion term loan due 2018 and had also amended its revolving credit facility due 2016 to provide relief from certain financial covenants for the next two years in exchange for reducing the facility to $600 million from $2 billion.

On the backdrop of uncertain economic scenario Arch had guided for 2012 metallurgical coal sales of approx 7.5 million tons and thermal sales volume of 128-134 million tons.  

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