Arch Coal Needs a Spark
Second only to Peabody Energy
Even so, that hasn't been enough to stop investors from insisting "the Street has gotten it wrong" and that Arch Coal stock has finally bottomed. While I'm willing to concede that Arch Coal's valuation is as attractive as that of Alpha Natural Resources
With brutal results already in hand from Cloud Peak
First, the good news: Arch Coal reported a third-quarter loss of only $1.8 million. While I typically don't celebrate quarterly losses from mature dividend payers, I'm willing to give management credit in this case because this is a significant improvement from a second quarter loss of $60.5 million. On a relative basis, this also outperformed the results from Peabody Energy.
Secondly, Arch Coal management was able to reduce operating cost per ton by close to 12%, demonstrating the difference that can be made when there's a strong emphasis on operational efficiency and profitability. This certainly supports the bullishness I've expressed towards Alpha Natural Resources, whose attention towards efficiency was equally as impressive.