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Arch Coal’s Outperformance in 3Q15, Slow Start in 4Q15

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Nov. 13 2015, Published 2:00 p.m. ET

3Q15 earnings and subsequent stock performance

Arch Coal (ACI) published its 3Q15 earnings on November 9, 2015. This series will discuss the company’s operational, financial, and stock market performance during that quarter and subsequently as of early November 2015.

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The misery of US coal producers continued in 3Q15 as natural gas prices remained subdued in spite of higher electricity demand on the back of warmer weather across the US. But Arch Coal gained during 3Q15 because its debt exchange program remained in the news throughout the quarter. The debt exchange program provided hope for Arch Coal’s survival in the market. Arch Coal gained by 2.9% in 3Q15.

But the fallout of its debt exchange deal in October led the company’s stock into a tumble after mid-October. Between October 1 and November 10, Arch Coal’s stock lost 51.5% while the VanEck Vectors Coal ETF (KOL) was marginally up during the same time. Meanwhile, Cloud Peak Energy (CLD) saw its stock prices soar by around 30% from the end of 3Q15 till November 10.

Arch Coal exercised a one-for-ten reverse stock split effective August 4. Past stock prices were adjusted to make them comparable with post-reverse-split prices.

Peer performance

Cloud Peak Energy (CLD) and Consol Energy (CNX) published their 3Q15 earnings on October 27, 2015. Cloud Peak Energy beat estimates while Consol Energy was unable to meet analyst expectations.

We’ve also covered Peabody Energy’s 3Q15 earnings in detail in a separate Market Realist series. Continue to the next part of this series for a closer look at what happened to Arch Coal after it terminated its debt exchange program on October 27.

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