Earnings Preview: Arch Coal

Arch Coal (ACI) is expected to report Q2 earnings before market open Friday, July 25, with a conference call scheduled for 11:00 a.m. ET.

Guidance

Analysts are looking for EPS of 64c on revenue of $737.07M. The consensus range is 51c to 82c for EPS, and $659.50M to $802.51M for revenue, according to First Call. Shortly after reporting Q1 earnings, Arch Coal said that it expects record performance in 2008. The company projected FY08 EPS of $2.40 to $2.80, EBITDA of $745M to $845M and capital spending of $310M to $340M. The consensus estimate for 2008 EPS is $2.67.

Last week and early this week, Arch Coal's stock had been rising on takeover chatter, reaching over $56 a share, but that has since cooled and the stock is trading slightly over $51 a share currently.

Analyst Views

On July 23, RBC Capital raised estimates and price targets for the coal industry, including Arch Coal, due to strength in U.S. and International coal industry fundamentals. The firm rates Arch Coal an Outperform and raised its price target to $72 from $38 on the company.