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Arch Coal Trims Earnings View, Shares Fall

NEW YORK ( TheStreet) -- Arch Coal (ACI - Get Report) lowered its full-year outlook late Tuesday, saying it now sees adjusted earnings of $1.11 to $1.15 per share, below the $1.25-$1.40 per share view it provided in late October.

"Lower shipment levels, partially driven by poor Eastern rail service, contributed to the guidance revision for 2010," said Steven Leer, the company's chairman and CEO, in a statement. "In addition, the Mountain Laurel operation was impacted in December by geologic challenges, which marginally affected our planned production during the quarter."

The stock fell 5.1% to $33.71 on volume of around 46,000 in extended trading, according to The news also appeared to weigh on Patriot Coal (PCX), which was down 2% to $25.35 on volume of roughly 130,000.

The average estimate of analysts polled by Thomson Reuters is for Arch Coal to earn $1.17 a share on revenue of $3.23 billion for its fiscal year ended in December. Through the first three quarters of fiscal 2010, Arch Coal has reported a cumulative profit of 63 cents a share, so its new outlook implies earnings ranging from 48 to 52 cents a share for the fourth quarter. Wall Street's consensus view is for earnings of 52 cents a share in December period.

Arch Coal added that it expects the aforementioned "geologic challenges" to keep its longwall at Mountain Laurel idle for most of the first quarter and it sees a scheduled restart in mid-to-late April.

Even with its difficulties at Mountain Laurel, St. Louis-based Arch Coal said it still anticipates coking and pulverized coal injection shipments of at least 7 million tons from its Central Appalachian operations during 2011, and that it's committed roughly 3 million tons of coal for 2011 delivery into metallurgical markets.

Arch Coal's stock rose roughly 30% in the past 52 weeks, hitting a 52-week high of $36.50 on Jan. 3. Of the 25 analysts covering the company, five are at strong buy, seven are at buy, 12 are at hold and one is at underperform.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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