[R]12:00PM New York – Arch Coal surges 4% on earnings rise 187%.[/R]

Arch Coal, Inc. coal miner said that the first quarter 2008 consolidated revenues increased 22% to $699.4 million from a year ago.

First quarter 2008 net income was $81.1 million, or $0.56 per diluted share, compared to $28.7 million, or $0.20 per share in the year ago. Adjusted earnings before interest, taxes, depreciation and amortization Income from operations more than doubled to $116.5 million.

Consolidated average sales price per ton changed 6% in the first quarter of 2008 compared to the fourth quarter of 2007. Consolidated per-ton operating costs altered 4% over the same time period. Arch''s first quarter 2008 consolidated per-ton operating margin expanded by 15% from a year ago.

Consolidated sales volumes in the first quarter of 2008 higher 9% compared to the same quarter of 2007.

Average sales price per ton increased 10% in the first quarter of 2008, benefiting from stronger coal market conditions than in the same quarter year-ago.

Arch''s first quarter 2008 consolidated per-ton operating margin increased 57% compared to the first quarter of 2007.

Steven F. Leer, Arch''s chairman and chief executive office said, ""Our first quarter 2008 results represent one of the best quarterly performances in Arch''s history as a public entity.""

In the Powder River Basin, first quarter 2008 sales volumes increased modestly compared to the fourth quarter of 2007. Due to higher pricing on contract and market index-priced tons average sales price per ton increased $0.44 in the first quarter of 2008 when compared to the prior-quarter a year-ago.

Arch''s Powder River Basin operations contributed $1.22 per ton in operating margin in the first quarter of 2008 compared to $0.31 per ton in the prior-quarter period.

Operating costs increased $0.53 per ton over this same time period.

In the Western Bituminous region, first quarter 2008 sales volumes increased 9% compared to the fourth quarter of 2007. Average sales price per ton first quarter 2008 increased $1.92 when compared to the prior-quarter period. Operating costs increased $2.46 per ton over the same time period. Arch''s Western Bituminous operations contributed $6.59 per ton in operating margin in the first quarter of 2008 versus $7.13 per ton in the same quarter last year.

In Central Appalachia, first quarter 2008 due to lower brokerage activity sales volumes rejected 13% compared to the fourth quarter of 2007. First quarter 2008, average sales price per ton improved by $9.25 when compared to the same quarter prior year. Per-ton operating costs increased $3.13 over the same time period. Central Appalachian operations contributed $14.02 per ton in operating margin during the first quarter of 2008 compared to $7.90 per ton in the prior-quarter last year.

Growing international coal demand, along with persistent challenges in augmenting global coal production, infrastructure and transportation networks, has led to a shift in worldwide seaborne coal trade flows. Constrained global coal supply has allowed the United States to become a more significant supplier of metallurgical and steam coal into the Atlantic and, in some cases, Pacific basins.


2008 outlook

In 2008, Arch estimates that global coal demand will outstrip supply by 25 million to 35 million metric tons, and expects this supply deficit to grow through 2010.

Arch estimates that U.S. coal imports could decline as much as 10 million tons this year due to supply disruptions and increased competition for those tons. The company also expects U.S. coal exports in 2008 to increase by another 20 million tons over last year''s strong market levels.

Leer said ""In 2008, we expect supply tightness in the eastern United States to trigger a meaningful reduction in generator stockpiles by year-end.""

Arch also believes that year-to-date coal consumption for electric generation has grown at an even faster rate than overall electric power demand.