widened its first-quarter loss, citing waning demand for coal.
The company lost $14.4 million, or 27 cents a share, compared with a loss of $7.4 million, or 14 cents a share, in the prior year's quarter. Including an accounting change and the payment of preferred dividends, Arch said it had a loss of $18 million, or 34 cents a share.
Revenue was $349.6 million, compared with $368.5 million in the year-earlier period. Total coal sales were 22.7 million tons, compared with 24.7 million tons in the first quarter of 2002.
"Coal demand was weaker than anticipated in the first quarter, as power generators continued to draw down their coal stockpiles in lieu of purchasing spot coal," said Steven F. Leer, Arch Coal's chief executive. "As a result, Arch further curtailed production at its mining operations, with predictable consequences for our first quarter results."
The company said first-quarter results also were affected by postretirement medical cost increases; heavy snows in February and March that disrupted production and shipments; higher diesel fuel costs; and difficult mining conditions at the Mingo Logan mine early in the quarter.
Nonetheless, Leer said the company is implementing aggressive steps to reduce both overhead and operating costs, and that areas where costs can be cut significantly have been identified. "We continue to be bullish on the future of U.S. coal markets," said Leer.
Arch expects second-quarter results to range from break-even to a loss of 10 cents a share, excluding certain costs. Analysts expect the company to earn a penny a share, on average. The company lost 5 cents a share in the second quarter of 2002. The company said if coal demand and pricing strengthen this summer, its financial performance should improve significantly in the second half.
Shares of St. Louis-based Arch were down 1.1% at $18.36 in midday trading Monday.