"In total, missed shipments and production curtailments resulting from high mine inventory levels cost the company an estimated $8 million after tax, or $0.13 per share, during the period," said Arch president Steven Leer.

According to Leer the company is currently working with the railroads in an effort to improve the level of rail service in the year's second half.

Arch expected to report earnings per share of approximately $0.20 for its second quarter ended June 30, 2004, excluding charges related to the termination of hedge accounting for interest rate swaps.

The company had previously announced that it expected to earn between $0.20 and $0.30 per share for the quarter.

Arch plans to announce its second quarter results before the market opens on July 26.