ST. LOUIS — Arch Coal, hurt by weakening demand for coal, warned Monday that it may have to file for bankruptcy protection. The company also reported a wider loss for its third quarter, however its adjusted results still beat Wall Street expectations and its shares rose.
The St. Louis-based company said it is in discussions with its creditors as it restructures its balance sheets. Whether an agreement with creditors is reached or not, Arch Coal said it may still need to file for Chapter 11 bankruptcy protection in the "near term." The company cited "extremely challenging current market conditions" for its need to restructure its balance sheet, according to a filing with the U.S. Securities and Exchange Commission.
Coal producers have been struggling as electric power companies shift to using natural gas, which is cheaper and produces less pollution than coal. Other coal producers, including Alpha Natural Resources Inc. and Patriot Coal Corp., have filed for bankruptcy protection this year.
On Monday, Arch Coal reported a loss of $2 billion in its third quarter, or $93.91 per share, compared with a loss of $97.2 million, or $4.58 per share, in the same quarter a year ago.
Losses, adjusted for one-time gains and costs, were $3.38 per share, surpassing Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for a loss of $5.91 per share.
Revenue fell 7 percent to $688.5 million in the period.
Shares of Arch Coal Inc. rose 13 cents, or 7.8 percent, to $1.79 in morning trading Monday. Its shares are still down nearly 90 percent since the beginning of the year.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on ACI at http://www.zacks.com/ap/ACI
Keywords: Arch Coal, Earnings Report