Arch Coal Inc.'s fourth-quarter profit rose 48 percent on higher coal prices and increased output following purchase of rival International Coal Group Inc.

But the nation's second-largest coal producer is painting a dimmer picture of domestic coal markets for 2012.

Like many other U.S. mining companies, Creve Coeur-based Arch will curtail output this year as inexpensive natural gas and mild weather reduce coal demand.

"Near-term market conditions have softened and we are reducing our planned production volumes to better align with weak generation and coal demand trends," Steven F. Leer, Arch's chief executive, said in a statement.

Specifically, Arch will reduce output at a Utah mine and it's laying off workers in eastern Kentucky as part of a plan to reduce production by 5 million tons in 2012. The company didn't say how many jobs would be eliminated.

Overall, Arch said U.S. coal consumption for electricity generation could decline by more than 50 million tons this year.

Arch's $3.5 billion purchase of ICG helped boost fourth-quarter net income to $70.9 million, or 33 cents a share, from $47.8 million, or 29 cents, in the same period a year earlier. Revenue rose 47 percent to $1.23 billion.

Excluding non-recurring costs, Arch earned 29 cents cents a share in the most recent quarter. Analysts, on average, expected the company to earn 32 cents a share.