It is sooty, it is carcinogenic when burned, it conjures up images of naive, misguided and underinformed canaries. These days, though, it is the new black gold.
The entire complex is shining like a diamond. We had ACI earnings today…take a listen:
St. Louis-based Arch said first-quarter net earnings were $81.1 million, or 56 cents per share, compared with $28.7 million, or 20 cents per share, a year earlier. Revenue jumped 22 percent to $699.4 million.
The results easily topped analysts’ average forecast of 47 cents per share on revenue of $674 million.
Arch increased its full year profit forecast to $2.40 to $2.80 per share from its earlier view of $2.00 to $2.50.
Also…
Sussman said it was significant that Arch had locked in orders for almost 10 million tons of coal this year and next at sky-high prices.
“The prices across the board are pretty fantastic,” he said. Arch did not specify the prices, but based on company statements, Sussman calculated Arch would get $85 per ton for Central Appalachian coal, over $100 per ton for metallurgical coal, which is used in steel-making, and around $17 per ton for coal from the Powder River Basin of Montana and Wyoming.
A ton of eastern U.S. coal that sold for $44.75 last April is now selling for $85.50. Powder River Basin coal has risen from $8 per ton to $15 in the last 12 months, according to the industry newsletter Coal & Energy Price Report.
“We’ve been successful in locking up a substantial portion of our metallurgical and steam coal sales opportunities in Central Appalachia given the strong pricing environment,” said John Eaves, Arch’s president and chief operating officer.
Source: Arch Coal Profit Jumps
Did you know coal is a major producer of electricity in the US? In fact…
Electricity shortages are likely in the United States in two or three years unless more coal-fired power plants are built, the head of coal producer Arch Coal Inc (ACI.N: Quote, Profile, Research) said on Monday.
“We are heading toward serious shortfalls,” Chairman and Chief Executive Steven Leer said during a conference call with analysts to discuss the company’s first-quarter financial results.
“Much of the United States will fall below the 15 percent reserve level in ‘09,” he said.
Asked about the impact of fewer coal-fired power plants being built, even as electricity demand is rising, Leer said he was constantly meeting with state governors and environmental groups to stress the need for new plants.
“It’s not just coal, all fuels are involved; or two to three years from now we’ll see real issues in power supply.
“The politics of the day will come home to roost in two or three years with the likelihood of electricity shortages,” Leer said. “At the end of the day, the world needs all this coal.”
According to a February report by the National Energy Technology Laboratory, which researches ways to make coal more environmentally friendly, 114 new coal-fired power plants have been proposed, but only 47 are under construction or in the process of getting local authority permits.
Source: Power Shortages
Here is a nice link to the earnings call…stay long and strong my friends…
