Arch Coal's 1Q profits tumble; issues Sour outlook, Declares $0.09 cent dividend

Arch Coal(ACI) profits fell more than 60 percent in the first quarter with power demand from steelmakers and other manufacturers evaporating. The company warned Friday of a potentially "ugly, ugly year" and released guidance well below Wall Street expectations.

"We believe our outlook presents a sober view of this perfect storm," said Leer, warning that "this recession is going to be deeper and perhaps longer than any we've experienced in the last 20 or 30 years."

Arch Coal Inc., which in January withheld its full-year earnings guidance, said it now expects to earn 20 to 60 cents per share this year -- a forecast Dahlman Rose & Co. analyst Daniel Scott cast as "particularly troubling." Analysts surveyed by Thomson Reuters were expecting $1.67 per share.

Last year, Arch earned $2.45 per share.

Shares of Arch tumbled $1.32, or 8.9 percent, to close at $13.59 as analysts rethought earlier forecasts.

ACI declared a regular quarterly cash dividend of $0.09 per share on the company's common stock. The dividend is payable June 15, 2009 to shareholders of record on June 1, 2009. In order to receive the dividend, investors must own the stock at least one day prior to the ex-dividend date of May 28.

With shares of ACI closing at $13.59 today, the dividend yields 2.65%.

Disclosure I am long ACI shares.