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Arch Coal Q3 Profit Falls 74%, Still Beats View (ACI)

By Dividend.com Staff
October 30th, 2009

arch-coal-q3-profit-falls-74-still-beats-view-aci

Coal producer Arch Coal, Inc. (ACI) said Friday that its third quarter profit plunged 74% from last year, hurt by lower revenue due to lower coal prices and shrinking demand.

The St. Louis-based company reported third quarter net income of $25.2 million, or 16 cents per share, down from $97.8 million, or 68 cents per share, in the year-ago period.

Revenue fell 20% from last year, to $615 million.

On average, Wall Street analysts expected a much smaller profit of 4 cents per share, on lower revenue of $605.1 million.

Looking ahead, the company provided some optimistic comments about future coal demand, saying that “We are also seeing domestic and global economies begin to transition from recession to recovery.”

Arch Coal shares rose 36 cents, or +1.7%, in morning trading Friday.

The Bottom Line
The company has a dividend yield of 1.56%, based on last night’s closing stock price of $23.10. The stock has technical support in the $18-$20 price area. If the shares can firm up, we see overhead resistance around the $24-$27 price levels. We would remain on the sidelines for now.

Arch Coal, Inc. (ACI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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Disclaimer: Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. The author is not registered as an investment adviser. The author may or may not hold positions in the securities mentioned in this article or video. The author relies upon the "publisher's exclusion" from the definition of "investment adviser" as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws.