Tumbling shares and reported earnings losses during the third quarter are offering little hope for the struggling coal industry, and pressure continues to mount on the weak sector.
Peabody Energy Corp., the largest private sector coal producer and a bellwether for the industry, reported on Tuesday a loss of $304.7 million, or $16.73 per share, in its third quarter. That compared with a loss of $150.6 million, or $8.44 per share, a year earlier.
The St. Louis-based miner cut its forecasts for coal sales and, in the U.S., revenue per ton. While Peabody touted continued cuts in its operating expenses, it said it expected “additional coal production curtailments in response to current prices.”
Creve Coeur-based Arch Coal Inc. moved closer to bankruptcy on Tuesday after it gave up on a debt swap proposal that had been aimed at boosting the coal miner’s liquidity. The company’s shares tumbled 46 cents, or 23 percent, to close at $1.55.
Heavily indebted Arch Coal has been hit by weak demand and stricter regulation, factors that have already pushed Alpha Natural Resources, Patriot Coal and other miners into Chapter 11 bankruptcy protection.