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What's in Store for Arch Resources' (ARCH) Q3 Earnings?

Arch Resources. ARCH is scheduled to release third-quarter 2020 results on Oct 22, before the market opens. This coal producer delivered a negative earnings surprise of 1.2% in the last reported quarter.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors to Note

Arch Resources has been executing the cash preservation plan, which is likely to have boosted cash flow and helped it to lower overhead and labor costs in the third quarter.

Arch Resources expects an incremental $30-$35 million in additional receipts for the second half of 2020. The receipts are associated with land settlement and the ongoing payroll tax deferrals.

However, at third quarter-end, the company decided to terminate its proposed thermal asset joint venture with Peabody Energy BTU, following the U.S. District Court's ruling to block the transaction. This is no doubt a big blow to the company’s prospects.

Expectations

The Zacks Consensus Estimate for third-quarter earnings and revenues is pegged at ($1.28) per share and $364 million, respectively. The projected revenues and earnings indicate a decrease of 131.8%, and 41.2%, respectively, from the year-ago reported figures.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Arch Resources this time around. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass estimates. That is not the case here as you will see below.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Arch Resources carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arch Coal Inc. Price and EPS Surprise

Arch Coal Inc. Price and EPS Surprise

Arch Coal Inc. price-eps-surprise | Arch Coal Inc. Quote

Stocks to Consider

Investors can consider the following players from the same sector that have the right combination of elements to post an earnings beat in the to-be-reported quarter.

Range Resources Corporation RRC is set to release third-quarter 2020 results on Oct 29. It has an Earnings ESP of +9.04% and a Zacks Rank #3.

Linde LIN is set to release third-quarter 2020 results on Nov 5. It has an Earnings ESP of +1.38% and a Zacks Rank #2.

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Peabody Energy Corporation (BTU): Free Stock Analysis Report
 
Range Resources Corporation (RRC): Free Stock Analysis Report
 
Linde plc (LIN): Free Stock Analysis Report
 
Arch Coal Inc. (ARCH): Free Stock Analysis Report
 
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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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