Arch Coal

(ACI) - Get Report

fell Tuesday after reporting strong fourth-quarter results, but warning of a first-quarter slowdown.

Excluding items, income was $23.0 million, or 34 cents a share, vs. net income of $2.4 million, or 4 cents a share, a year ago. Analysts were expecting 29 cents a share, according to Thomson First Call.

"Despite continuing rail difficulties, Arch achieved solid results in the fourth quarter," the company said. "Looking ahead to 2005 and beyond, we expect to build on our recent progress as an increasing percentage of our sales tonnage resets to market-based pricing."

Revenue increased 48% to $553.1 million, "due principally to higher realizations and the acquisition of the North Rochelle mine and the remaining interest in Canyon Fuel, the company's Utah subsidiary."

Looking ahead, Arch expects 2005 EPS of between $1.50 and $2.00. The consensus is $2.26.

The company, however, warned about its first quarter, saying "geologic challenges" at its Mingo Logan mine during January as well as rail disruptions will mean first-quarter results will be "weaker than subsequent quarters." The company gave no EPS guidance.

Shares fell $1.12, or 3%, to $36.39.