Arch Coal, the second-largest U.S. coal producer, said it expects a profit of $2.03 to $2.52 a share, and earnings before interest, taxes, depreciation and amortization of $930 million to $1.05 billion this year, which is above previous guidance issued by the Missouri-based company.
Arch (ACI) cited higher coal prices as one reason for the improved outlook. For the first quarter, Arch posted a profit a profit of $55.9 million, or 34 cents a share, compared with a year-earlier loss of $1.8 million, or 1 cent. Revenue rose 23% to $872.9 million.
Metallurgical coal prices soared 74% to $225 a ton in the first quarter from a year earlier, Bloomberg News reported, citing Bank of America Merrill Lynch. Arch said earlier this year it is expecting to sell 155 million to 160 million tons of coal this year. The company is forecasting capital spending of $410 million.
Arch said it expects to sell 7.5 million tons of metallurgical coal this year with that total perhaps rising to 8 million tons next year. Peabody Energy (BTU) is the largest U.S. coal producer.