ST. LOUIS (AP) — Arch Coal Inc. said Tuesday that it logged a second-quarter loss reflecting overall weakness for coal used in making steel. The company said it will keep tightening its belt for the rest of the year.
The St. Louis-based company — among the world's biggest coal producers — posted a net loss of $72.2 million, or 34 cents per share, during the April-June quarter. That compares with losses of $435.5 million, or $2.05 per share, a year earlier.
Excluding one-time items, Arch reported an adjusted loss of $60.5 million, or 29 cents per share. That's better than the loss of 34 cents expected on Wall Street, according to FactSet.
Revenue fell to $766.3 million from $965.7 million. Analysts expected revenue of $912.7 million.
Arch shares fell 13 cents, or 3.2 percent, to $3.99 in morning trading.
Given the prolonged soft market dating to late 2011, Arch has jettisoned what it called non-core assets involving coal used by power plants to generate electricity. The company last month reached a $435 million deal last month to sell its Canyon Fuel Co., including two longwall mines and some 105 million tons of bituminous coal reserves in Utah, to Bowie Resources.
Arch expects that sale, presumably to be finalized by October, to save it more than $200 million in capital and administrative costs from next year through 2017, allowing the company to "focus our resources on the most value-enhancing parts of our business."
Arch, which during the second quarter idled two mines and delayed until the next year another mine's startup, also further cut its capital-spending forecast for all of 2013, to $280 million to $310 million.
"Our cost-reduction initiatives are generating results, and we will continue to pursue aggressive cost reductions across all of our operations during the second half of the year," John Eaves, Arch's president and CEO, said in a statement.
"We will continue to focus on the things we can control during the downturn, while carefully positioning ourselves for the market rebound," he added, expecting the company to "emerge as an even stronger player when the market rebounds."
While awaiting that comeback for steel-making coal, Arch said the outlook for U.S. coal used in electricity generation is improving, noting that coal used by power plants has risen by 10 percent this year through May compared to the same period a year ago. Arch expects demand for that kind of coal to spike by 50 million tons compared with last year's levels.
"We are seeing the beginnings of a rebound in domestic thermal coal markets," Eaves said.
While crediting Arch with "effective" cost controls that offset lower coal pricing, Cowen & Co. analyst Daniel Scott said in a research note to clients that "the company's market commentary was as expected: improving domestic thermal (coal) environment and cautious outlook" on global markets for coal used in steel production.