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Alliance Resource (ARLP) Q3 Earnings Lag Estimates, View Cut

lliance Resource Partners, L.P. ARLP reported third-quarter 2019 operating earnings of 39 cents per unit, lagging the Zacks Consensus Estimate of 46 cents by 15.2%.

Total Revenues

Total revenues in the reported quarter were $465 million, missing the Zacks Consensus Estimate of $503 million by 7.7%. The reported revenues also declined 6.6% year over year.

The year-over-year decline in the top line was due to reduced coal sales volumes and prices.

Alliance Resource Partners, L.P. Price, Consensus and EPS Surprise

Alliance Resource Partners, L.P. Price, Consensus and EPS Surprise

Alliance Resource Partners, L.P. price-consensus-eps-surprise-chart | Alliance Resource Partners, L.P. Quote

Operational Update

In the reported quarter, Alliance Resource sold 9.32 million tons of coal at an average sales price of $45.06 per ton compared with 10.07 million tons at an average sales price of $45.71 in third-quarter 2018.

Total operating expenses in the quarter under review were $414.3 million, decreasing 2.1% year over year.

Interest expenses were $11.7 million, increasing 19.4% year over year.

Financial Highlights

Cash and cash equivalents as of Sep 30, 2019 were $31.8 million compared with $244.1 million at the end of 2018.

Long-term debt as of the same date was $637.1 million compared with $564 million at 2018-end.

Cash used in operating activities during the first nine months of 2019 was $423.6 million compared with $195.3 million in the comparable year-ago period.

Guidance

Alliance Resource lowered its 2019 production guidance to the range to 40.1-40.4 million short tons versus earlier expectation of 40.8-42.3 million short tons. The downward revision in coal production view takes into account the decline in domestic and international demand for coal, higher competition from natural gas, along with pricing pressure from its peers.

Net income for 2019 is now expected in the range of $400-$420 million, down from earlier expectation of $432.5-$472.5 million.

The company now expects 2019 capital expenditure in the range of $330-$350 million, down from the earlier projection of $345-$375 million.

Zacks Rank

Alliance Resource currently has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Warrior Met Coal Inc. HCC is slated to report third-quarter earnings on Oct 30. The Zacks Consensus Estimate for earnings per share for the to-be-reported quarter is currently pegged at 82 cents.

CONSOL Energy Inc. CEIX is set to report third-quarter earnings on Nov 5. The Zacks Consensus Estimate for the partnership’s earnings per unit is currently pegged at 50 cents.

Natural Resource Partners L.P. NRP is scheduled to report third-quarter earnings on Nov 6. The Zacks Consensus Estimate for the partnership’s earnings per unit is currently pegged at $1.23.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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