Arch Coal Swings to Loss

The company cites rising costs.
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Arch Coal

(ACI) - Get Report

slid 6% Friday after the company swung to fourth-quarter loss.

The company lost $1 million, or 2 cents a share, compared with profits of $20 million, or 32 cents a share, a year ago. Excluding special items, the company earned $17.9 million, or 25 cents a share. Analysts surveyed by Thomson First Call were expecting the company to earn 29 cents a share.

Fourth quarter revenue rose 12% from a year ago to $619.8 million. Analysts were expecting revenue of $662 million.

In fiscal 2006, the company expects to earn $3.50 to $4.25 a share. Analysts were forecasting earnings of $4.42 a share.

The company said it plans to reopen its Coal Creek mine, which was idled in mid-2000 due to market conditions, and invest $50 million in the project. It expects an annualized production of about 15 million tons of coal from this mine.

During the fourth quarter, Arch sold 33.5 million tons of coal, down 3% compared with the year-ago period. Operating margin per ton of coal sold was down to $0.66, compared with $1.19, a year ago.

"The quarter just ended was one of the most eventful in Arch's history," the company said. "We restructured our Central Appalachian operations, completed a strategic transaction in the Powder River Basin, induced conversion of nearly all of our preferred stock into common shares, addressed a combustion-related event at the West Elk mine in a safe and efficient manner, and began work on the re-start of the Coal Creek mine."

On Friday, Arch fell $4.39 to $74.41.

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