Cost-cutting measures, such as shutting down longwall mining at Carbon County’s Dugout Canyon coal mine, lifted earnings in the fourth quarter of 2011 for Arch Coal Inc., owner of Utah’s largest coal mining operation.
St. Louis-based Arch reported Friday that its net quarterly income reached $70.9 million, or 33 cents per share, in the quarter ending Dec. 31, compared with $47.8 million, or 29 cents per share, a year earlier. Earnings were based on revenue of $1.2 billion, up 47 percent.
 |
Join the Discussion |
 |
Post a Comment |
For all of 2011, Arch reported net income of $205 million on record sales of $4.3 billion, 35 percent more than in 2010 despite lower sales volume.
"Arch delivered solid quarterly financial results despite weakening coal market conditions as the fourth quarter progressed," said Steven Leer, Arch’s chairman and CEO, crediting higher prices for coal, increased exports and "solid cost control."
Those cost controls included the company’s Nov. 3 decision to lay off 114 miners at Dugout Canyon, the smallest of three mines operated in Utah by Arch’s subsidiary, Canyon Fuel Co. That represented almost half of the mine’s workforce of 230 last fall, according to federal Mine Safety and Health Administration records. Canyon Fuel employs about 670 at the other two mines, Sufco and Skyline.
Together, the three mines produced 11.7 million tons of coal in 2010.
But decreasing demand for coal-fired electricity in the West prompted the company to cut production, Leer said.
"In 2012, Arch estimates that domestic coal consumption for power generation could decline by 50 million tons or more from 2011 levels," he said. "Mild weather has reduced power demand, and the current oversupply in natural gas markets could induce more coal displacement."
Twitter: @sltribmikeg
Copyright 2012 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
