Coal miner Arch Coal Inc. (ACI) recently increased its quarterly dividend by a penny to 11 cents per share. This reflects a 10% increase from the previous dividend rate of 10 cents per share and brings the company’s annualized dividend rate to 44 cents per share.
Arch Coal said the new dividend will be paid on June 15, 2011 to shareholders of record as of June 01, 2011.
Arch Coal’s peer Walter Energy Inc. (WLT) announced a quarterly dividend of 125 cents per share in the last week of April 2011. This reflects an annual dividend rate of 50 cents per share and a current dividend yield of 0.36%. Arch Coal’s current dividend yield of 1.28% is way above its peers.
Arch Coal’s management said the increase in dividend reflects the confidence in the future earnings potential of the company. This dividend increase marks the company’s sixth increase in the past eight years.
Based in St. Louis, Missouri, Arch Coal surpassed the Zacks Consensus revenue and earnings per share expectations during the first quarter of2011. The company reported net adjusted earnings of 36 cents per share and revenue of $872.9 million, which beat the Zacks Consensus Estimates by 4 cents and $41.9 million, respectively. This outperformance was fueled by the company’s strong sale of the high variety metallurgical coal in the quarter.
Having wrapped up a solid first quarter, Arch Coal has revised its 2011 earnings guidance, which now ranges between $2.10 and $2.60 per share, up from the previous range of $2.00 to $2.50 per share. The company expects total sales volumes in 2011 to be in the range of 155 million to 160 million tons, with metallurgical coal sales comprising 7.5 million tons.
Given the scenario of robust coal demand in the international markets, we expect the company to achieve its revised targets for 2011. The Zacks Consensus earnings estimates for the second quarter, fiscal 2011 and fiscal 2012 stand at 62 cents, $2.50 and $3.84 per share, respectively.
Arch Coal engages in the production and sale of steam and metallurgical coal. The company also ships coal to domestic and international steel manufacturers as well as international power producers.
Arch Coal currently retains a Zacks #3 Rank (short-term Hold rating), which supports our long-term Neutral recommendation on the stock.
ARCH COAL INC (ACI): Free Stock Analysis Report
Be the first to comment