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What Awaits Alliance Resource Partners (ARLP) in Q4 Earnings?

Zacks Equity Research

Alliance Resource Partners, L.P. (ARLP) is set to report fourth-quarter and 2018 results on Jan 28, before market opens. In the third quarter, the partnership reported a negative earnings surprise of 25.68%.

Let’s see how things are shaping up prior to the upcoming results.

Factors to Consider

Alliance Resource Partners ismaking investments in various infrastructure projects at several operations to improve productivity and provided 2018 capex of $245-$260 million for the coal business. Anticipating increase in production, the partnership expects total 2018 net income of $415-$425 million and EBITDA of $730-$740 million.

In the fourth quarter, the partnership expects additional volumes on positive impact from the 10th unit at River View and the second unit at Gibson. Alliance Resource Partners expects sales tons and production to increase nearly 1 million tons in the fourth quarter compared with third-quarter tally.

The Zacks Consensus Estimate for fourth-quarter 2018 earnings per unit is pegged at 77 cents. The projected figure reflects year-over-year increase of 40%. The Zacks Consensus Estimate for fourth-quarter 2018 sales is pegged at $535.60 million, reflecting year-over-year growth of 10.84%.

Earnings Whispers

Our proven model does not conclusively show that Alliance Resource is likely to beat estimates this quarter as it does not possess the key components. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. However, that is not the case here as you will see below.

Zacks ESP: The company’s Earnings ESP is 0.00%.

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

 

Alliance Resource Partners, L.P. Price and EPS Surprise | Alliance Resource Partners, L.P. Quote

 

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Alliance Resource holds a Zacks Rank #3.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are some companies from the Oils-Energy sector that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Warrior Met Coal Inc HCC has an Earnings ESP of +21.39%. The company sports a Zacks Rank #1 and is expected to report fourth-quarter 2018 earnings on Feb 21.

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

CNX Resources Corporation CNX has an Earnings ESP of +5.26% and a Zacks Rank #2. The company is expected to release fourth-quarter 2018 results on Jan 31.

EnLink Midstream Partners, LP ENLK has an Earnings ESP of +10%. It carries a Zacks Rank #2 and is expected to report fourth-quarter 2018 earnings on Feb 19.

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