ST. LOUIS (AP) — Coal producer Arch Coal Inc. on Tuesday posted a lower-than-expected loss of $128.4 million in the third quarter as reduced expenses helped temper weaker coal prices.
The St. Louis-based company — among the world's biggest coal producers — lost 61 cents per share in the July-through-September period. That compares with net income of $45.8 million, or 22 cents per share, a year earlier.
Excluding one-time items, Arch said it lost $1.8 million, or a penny per share. That's down from an adjusted profit of $41.8 million, or 20 cents per share, last year.
Revenue fell 19 percent to $791.3 million from $975.2 million a year ago.
Analysts surveyed by Fact Set expected a loss of 31 cents on sales of $878.3 million.
Given the prolonged soft market dating to late 2011, Arch has jettisoned what it called non-core assets involving coal used by power plants to generate electricity. In August, the company completed the sale of its Canyon Fuel Co., including two longwall mines and some 105 million tons of bituminous coal reserves in Utah, to Bowie Resources, pocketing $423 million in net proceeds.
Arch expects that deal to save it more than $200 million in capital and administrative costs from next year through 2017, responding to what Arch CEO John Eaves called "challenging global coal markets." The company insisted Tuesday those markets are poised to rebound at least when it comes to electricity generation, noting that coal stockpiles at U.S. utilities have dropped by more than 25 million tons since the beginning of the year.
Still, Arch said, markets for coal used to make steel remain weak, given the global glut of that type of coal and soft steel demand in Europe.
Arch said it expects 2013 sales of coal used for electricity generation to be 134 million to 137 million tons, raising the lower end of that forecast by four million tons. But Arch eased its outlook for shipments of steelmaking coal to a range between 6.9 million to 7.3 million tons, from its earlier guidance of 7.7 million to 8.3 million tons.
Arch Coal shares fell 12 cents, or 3 percent, to $4.04 in afternoon trading.