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Despite a tumbling economy where recession fears gain ground each day, the good times are rolling for coal producer Arch Coal Inc. (NYSE: ACI) which reported this morning that its first-quarter profit nearly tripled. For this period, the company counted strong demand and higher fuel prices. Wall Street expressed enthusiasm over its surprising earnings numbers by pushing the stock to a new 52-week high. The coal producer said its profit increased during the first quarter to $81.1 million. This is a significant jump from the same period of last year when the company reported a profit of $28.7 million. Arch Coal posted quarterly earnings of 56 cents per share, topping analysts' predictions for earnings of 46 cents per share.
Taking a look at the company's quarterly revenue, we see a growth of 22% to $699.4 million as prices have almost doubled during the past year. The company also said it sold 34.3 million tons of coal in the first quarter compared with 31.4 million tons in the same period a year ago. Analysts had forecast $686.8 million in revenue, according to Thomson Financial.
Looking ahead, the company believes that coal markets will continue to grow. Arch Coal lifted its full year earnings outlook to a range between $2.40 and $2.80 per share from, compared with its previous forecast of $2.00 to $2.50 per share.
So far investors are enjoying the company's better-than-expected profit and its earnings outlook as its shares are up 6.08% morning trading. After a fall last month, Arch Coal has shown a rebound over the past few months and I expect to see further gains based on its positive quarterly numbers.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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