DTC Coal “Earnings” Flash

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DTC Coal “Earnings” Flash

DTC Flash©: Arch Coal Q3 2017 Earnings Analysis and Call Comments

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Key takeaways and DTC’s insight from coal company quarterly results.

Arch Coal Q3 2017 Earnings Analysis and Call Comments

DTC Short and Sweet: Q3 revenues totaled $613.5mm, up from $549.9mm in Q2 mostly driven by higher PRB sales. Net income was $68.4mm, up from Q2 ($37.2mm). Operating costs rose in their Met segment to $64.46 from $60.95 in Q2 due to difficult mining conditions and rail service issues and fell in their PRB segment from $10.82 to $10.27on higher volume. ARCH raised its cash cost guidance in the Met segment as a result from $51-56/ton to $56-60/ton and lowered its met coal sales guidance to 6.6 – 6.8 mm tons from 6.9 – 7.1 mm tons in Q2 noting startup issues in the Cedar Grove seam at Mtn Laurel and a roll in the coal seam at Leer. ARCH noted that at the midpoint of their guidance they are now 99% committed for thermal sales in 2017 and more than 98% committed for coking coal sales with 10% of that on index-based pricing.

    • Q3 2017 EPS: $2.83 diluted; $2.54 adjusted diluted (vs average analyst estimates of $1.82 and a range of $1.12 – $2.78)
    • Q3 2017 Adj EBITDAR: $104.27 mm (vs $95.4 mm seq)
    • Q3 2017 Sales (total): 26.2 mm tons (vs 22.5 mm tons seq)
    • 2017 Guidance

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