Arch Coal Fired Up

The stock surges after a strong first quarter.
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Arch Coal's

(ACI) - Get Report

first-quarter earnings rose more than tenfold from the year-ago period, boosted by high coal prices.

The St. Louis-based coal producer earned $60.7 million, or 84 cents a share, in the quarter, compared with $6.6 million, or 7 cents a share, a year ago. Adjusted for items, earnings were 85 cents a share in the most recent quarter while analysts surveyed by Thomson First Call were expecting earnings of 58 cents a share.

First-quarter revenue rose 5.7% from a year ago to $634.5 million as against analysts' expectation of $574.6 million. Sales volumes declined to 31.7 million tons from 37 million tons in the previous year due to the sale of select operations in Central Appalachia at the end of 2005.

The company raised its previous earnings guidance of $3.50 a share to $4.25 a share for the full year to $3.75 a share to $4.25 a share. Analysts are expecting earnings of $3.91 a share for the full year.

"We achieved substantially higher sales prices in each of our operating basins, a nearly 300% increase in our average per-ton operating margin, and a solid performance from our mines," the company said. "We expect to build on those results as the year progresses, with further strengthening in margins, earnings and cash flow, particularly during the year's second half."

First-quarter operating income rose more than three-fold from a year ago to $94.14 million and operating margin increased 1051 basis points to 14.8%.

Arch rose $9.16 to $93.78.

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