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Alliance Resource (ARLP) Q4 Earnings & Sales Lag Estimates

Zacks Equity Research

Alliance Resource Partners, L.P.  ARLP reported fourth-quarter 2018 operating earnings of 69 cents per unit, missing the Zacks Consensus Estimate of 74 cents by 6.8%.

Total Revenues

Total revenues in the reported quarter were $531.8 million, which lagged the Zacks Consensus Estimate of $533 million by 0.1%. However, the reported revenues reflect year-over-year growth of 10%.

The year-over-year improvement in the top line was on account of overall higher coal sales volume coupled with increased coal sales price per ton. Further, increased revenues from transportation aided its top-line growth.

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. Quote

 

Segmental Performance

Illinois Basin: The segment reported total sales of $321.3 million, up 11.1% from the prior-year period. Sales volume of coal in the quarter under review went up 8% and price per ton of coal increased nearly 2.9% year over year.

Appalachia: The segment reported total sales of $158.9 million, down 2.5% from the prior-year period. Sales volume of coal in the quarter under review decreased 8.4% from the year-ago level. However, price per ton of coal was up nearly 6.5% year over year.

Operational Update

In the reported quarter, Alliance Resource’s total operating expenses were $482.6 million, up 19.2% year over year.

Interest expenses were $9.6 million, down 8.6% year over year.

Financial Highlights

Cash and cash equivalents as of Dec 31, 2018 were $244.1 million compared with $6.8 million at the end of 2017.

Long-term debt as of Dec 31, 2018 was $564 million compared with $415.9 million at the end of 2017.

Cash provided from operating activities in 2018 was $694.3 million compared with $556.1 million a year ago.

Guidance

Alliance Resource expects total 2019 production in the range of 43.5-45 million short tons. Cold weather across a large portion of the eastern United States is expected to increase coal burn as well as reduce utility stockpiles, and in turn boost coal demand in 2019.

Net income in 2019 is expected in the range of $505.5-$545.5 million and EBITDA is projected within $720-$760 million.

The company expects 2019 capital expenditure in the range of $360-$400 million.

Zacks Rank

Alliance Resource currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

CONSOL Coal Resources LP  CCR is expected to report fourth-quarter earnings on Feb 5. The Zacks Consensus Estimate for the partnership’s earnings is currently pegged at 48 cents per unit.

Warrior Met Coal Inc. HCC is slated to report fourth-quarter earnings on Feb 21. The Zacks Consensus Estimate for the company’s earnings for the to-be-reported quarter is currently pegged at $2.03 per share.

SunCoke Energy, Inc. SXC  is expected to report fourth-quarter earnings on Jan 30. The Zacks Consensus Estimate for the company’s earnings is currently pegged at 5 cents per share.

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