-- Arch Coal Inc., the second-largest U.S. coal producer, surged the most in three and a half months after profit tripled on higher output and prices, and the company raised its forecast for the year.

Second-quarter net income climbed to $113 million, or 78 cents a share, from to $37.6 million, or 26 cents, a year earlier, St. Louis-based Arch said today in a statement. Arch was expected to earn 66 cents, the average of six analyst estimates compiled by Bloomberg. Sales rose 31 percent to $785.1 million.

Growing demand for coal in Asia and Eastern Europe, combined with production declines in China, Australia and South Africa, boosted prices to records this year. In April, Arch, along with partners Peabody Energy Corp. and Alpha Natural Resources Inc. raised its stake in a Virginia export terminal.

``They blew away the street numbers with some really strong pricing,'' said Gordon Howald, an analyst at Calyon Securities in New York who has a ``buy'' rating on the shares. ``They've got production coming online at the right time.''

Arch rose $4.70, or 9.2 percent, to $55.64 in New York Stock Exchange composite trading. It was the biggest gain since April 8. The stock has climbed 84 percent in the past year.

Cash prices for coal in Wyoming's Powder River Basin, where Arch gets about three-fourths of its production, jumped 63 percent from a year earlier to a second-quarter average of $15.10 a ton, according to data compiled by Bloomberg.

Increased Sales

Arch said it sold 34.4 million tons of coal in the second quarter, up from 33.3 million tons a year earlier. The average price for the company's coal rose 28 percent to $21.04 a ton.

In Central Appalachia, Arch boosted coal sales 15 percent to 3.9 million tons, largely from its Mountain Laurel mine in West Virginia, which produces higher-priced metallurgical coal used in steelmaking. Prices there surged 44 percent to $69.54 a ton.

Midwest floods disrupted some deliveries from Wyoming's Powder River Basin to markets east of the Mississippi River. Peabody Energy Corp., the largest U.S. miner, on July 23 said 8 million tons of Powder River shipments were halted because of the flooding.

Higher prices will boost profit for the year to $2.50 to $2.85 a share, up from an earlier forecast of $2.40 to $2.80 a share, Arch said. Analysts expected the company to earn $2.67 a share, the average of 20 estimates compiled by Bloomberg.

Production for the year will be lower than Arch forecast in April because of the Midwest flooding and heavy rains in the Powder River Basin that slowed output. Arch now expects to produce 133 million to 137 million tons this year, down from an earlier forecast of 137 million to 140 million.

``Positive trends in domestic coal markets, coupled with sustained growth in world coal markets, are supportive of current pricing levels,'' Arch Chief Executive Officer Steven Leer, 56, said in the statement.