Why Arch Coal Dropped Like a Rock
Feb 5th 2013 5:50PM
Updated Feb 5th 2013 6:45PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of coal miner Arch Coal fell 12% today after reporting earnings.
So what: Fourth0quarter revenue fell 21% to $968.2 million, still below the $999.2 million analysts expected. The company lost $295.4 million, or $1.39 per share, but when adjusted for one-time items the loss falls to $0.42, still below the $0.17 Wall Street expected.
Now what: Regular readers know that I haven't been a fan of coal stocks for some time, and this is exactly why. Low-cost natural gas is fighting coal domestically, countries like China are mining their own coal as fast as they can, and even metallurgical coal has seen a drop in prices. I don't see any reason to get bullish now, and the better question might be, How long can Arch Coal survive?
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The article Why Arch Coal Dropped Like a Rock originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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