The company may file for relief under Chapter 11 whether it strikes a deal with creditors or not, Arch said.
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On the heels of a $168 million operating loss posed in the second quarter of the year, the third quarter report brings the company’s losses to more than $2.3 billion through the first nine months of 2015, compared to $144 million for the same time in 2014.
“As demonstrated by our third quarter results, our operations continue to generate a significant amount of cash; and we are maintaining sufficient liquidity to continue operating as normal”, John T. Drexler, Arch’s senior vice president and chief financial officer, says in the report. The company reported ($3.38) earnings per share (EPS) for the quarter, topping the consensus estimate of ($5.45) by $2.07, AnalystRatings.NET reports.
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Arch Coal, hurt by weakening demand for coal, warned Monday that it may have to file for bankruptcy protection. Vetr cut Arch Coal from a “strong-buy” rating to a “strong sell” rating and set a $6.24 price target for the company.in a research report on Wednesday, September 2nd. JPMorgan Chase & Co. lowered Arch Coal from a “neutral” rating to an “underweight” rating in a report on Tuesday, October 13th. The thermal coal used by power plants is facing competition from cheap natural gas and tougher emissions standards. Arch executed a 1-for-10 reverse stock split in August to avoid being delisted from the New York Stock Exchange. The oversupplied market for metallurgical coal probably won’t get any better until more production is shut down, the company said. In year-over-year (YoY) terms, revenue fell by 7.2%. “Despite these efforts, however, the hard conditions impacting the coal industry persist, and we expect they will continue throughout 2016”. Arch is also terminating a $250 million credit facility as of November 11 under which it has no borrowings, the company said.
