(RTTNews) - Coal producer Arch Coal Inc. (ACI: News ) on Friday posted a steep decline in third-quarter profit, hampered by weak demand amid enonomic slowdown. Further, the company revised its earnings forecast for the full year, and said it sees improvement in met markets and in the underlying global and domestic economies.

The St. Louis, Missouri-based company's third-quarter net income was $25.2 million or $0.16 per share, compared to $97.8 million or $0.68 per share in the year-ago quarter.

On average, 23 analysts polled by Thomson Reuters expected the company to post earnings of $0.04 per share. Analysts' estimates typically exclude special items.

Quarterly revenues declined to $615.0 million from $769.5 million reported in the same period a year ago, and fell shy of sixteen Wall Street analysts' consensus revenue estimate of $605.08 million for the quarter.

Steven Leer, chairman and chief executive officer of Arch Coal, said, "We achieved margin expansion in each operating segment, driven by increased metallurgical coal demand in Central Appalachia and continued successful cost control across all regions. Our trading and brokerage operations also added incremental earnings in the quarter just ended."

Consolidated tons sold and average sales price per ton declined to 29.1 million tons from 34.8 million tons in the previous year. Western Bituminous region's third quarter volumes fell to 4.6 million tons from 5.1 million tons in the third quarter of 2008. In Central Appalachia, volumes declined to 3.0 million tons from 3.5 million tons last year. Consolidated average sales price per ton also decreased to $20.05 from $20.38 last year.
The company's consolidated cash cost per ton in the quarter increased to $15.75 from $14.59 a year earlier. Cash margin per ton, on a consolidated basis, decreased to $4.30 from the previous year's $5.79.

For the nine-month period, the company reported net income of $40.6 million or $0.28 per share, compared to $292.0 million or $2.02 per share in the prior-year period.

Revenues for the nine months ended September 30, 2009 dropped to $1.85 billion from $2.25 billion in the previous year.

Looking ahead, the company projects fiscal 2009 earnings to range between $0.28 and $0.43 per share, versus its prior outlook range of $0.25 - $0.55 per share. The full year guidance includes an expected $15 million of acquisition-related expenses for Jacobs Ranch, and an estimated $16 million of non-cash intangible asset charges related to above-market sales contract amortization stemming from the Jacobs Ranch acquisition that is expected to be recorded in the fourth quarter. Analysts are looking for earnings of $0.31 per share for the full year.

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