Arch Coal, Peabody Energy report big second quarter losses
(Updated at 12:20 pm July 30, 2015 with Arch Coal quarterly results)
St. Louis-based Arch Coal has followed Peabody Energy this week in posting a significant quarterly loss. The company says its net loss widened to $168 million, compared to roughly $97-million for the same period a year earlier.
(Read the Arch Coal earnings report)
"Arch continues to weather the significant market challenges facing the industry," said Chief Executive Officer John W. Eaves.
Our original post on Peabody Energy results is below:
Peabody Energy announced Tuesday it has suspended dividend payments to shareholders for the quarter.
The coal giant also reported a $1 billion loss in the second quarter, much of it stemming from a $900 million “asset impairment.” Essentially, the company is correcting its balance sheet, using the market value of its assets rather than previous value.
It’s been a tough few years for the coal industry as utilities have increasingly turned to natural gas. Peabody president and CEO Glenn Kellow said during a call with analysts on Tuesday that demand remains sluggish this year.
"As a result of lower natural gas prices we expect 2015 U.S. coal demand to decline 90 to 100 million tons compared to 2014 levels," he said. "Through June U.S. coal generation declined 14 percent."
Kellow said the company is becoming leaner, as a result.
Peabody announced earlier this summer that it will cut 250 salaried positions, including 50 in St. Louis. Kellow said the company has cut regional offices in Indiana and Wyoming and is looking at others.
The company totaled $1.34 billion in revenues for the quarter, compared to $1.76 billion in the prior year.
Follow Maria on Twitter: @radioaltman