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Thursday, March 28, 2024

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  1. phil

    Arch Coal -8% after Q1 earnings miss, weak met coal sales outlook

    02:57 PM ET · ACI

    • Coal shares are mostly lower after Arch Coal’s (ACI -8.1%) big earnings miss on lower than expected margins across all regions and guidance for reduced shipments of met coal this year as prices and demand remain weak: ANR -2.7%, BTU -1.1%, CLD -3.4%, CNX -1.2%, WLT +0.9%, WLB +0.3%.
    • ACI said in its earnings call that its main market for met coal demand is healthy, citing U.S. steel utilization trending above the five-year average and auto sales projected to reach nearly 16.5M units in 2014, the highest level since 2006.
    • Looking for a silver lining in the Q1 results, Sterne Agee says ACI’s attention to cost control, improved thermal competitive economics with natural gas, supportive balance sheet liquidity and a continued long-term role of U.S. coal into the global markets should support a cyclical valuation turn.
    • Citigroup’s Brian Yu, meanwhile, expects ANR to follow ACI and WLT in cutting met coal production.
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