Arch Resources (ARCH) Q2 Earnings Lag Estimates, Sales Beat

Arch Resources Inc. ARCH reported second-quarter 2023 operating earnings per share (EPS) of $4.04, which missed the Zacks Consensus Estimate of $5.82 by 30.6%. The bottom line also declined 80.2% from the year-ago quarter’s $19.30.

Revenues

Total revenues were $757.3 million, which beat the Zacks Consensus Estimate of $633 million by 19.6%. The top line, however, decreased 33.2% from $1,133.4 million in the year-ago quarter.

Arch Resources Inc. Price, Consensus and EPS Surprise

Arch Resources Inc. price-consensus-eps-surprise-chart | Arch Resources Inc. Quote

Highlights of the Release

In the Metallurgical segment, ARCH sold 2.5 million tons of coal, up 19% from the prior-year quarter’s figure of 2.1 million tons. Cash margins were $53.73 per ton compared with $187.45 in the year-ago quarter.

In the Thermal segment, the company sold 16.3 million tons of coal, down 8.4% from the prior-year quarter’s figure of 17.8 million tons. Cash margins were $1.77 per ton compared with $5.14 in the prior-year period.

Arch Resources used $73.5 million in the reported quarter to repurchase 623,304 shares at an average price of $117.91 per share. As of Jun 30, 2023, ARCH had $248.9 million of remaining authorization under its existing $500-million share repurchase program.

Financial Highlights

Cash and cash equivalents were $201.5 million as of Jun 30, 2023, compared with $236.1 million as of Dec 31, 2022.

Long-term debt was $109.2 million as of Jun 30, 2023, compared with $116.3 million as of Dec 31, 2022.

Cash provided by operating activities for the six months ended June 2023 was $322.9 million compared with $561.2 million in the year-ago period.

Guidance

Arch Resources expects coking coal of 8.9-9.7 million tons for 2023. It also expects coking coal sales volume to increase 5-10% in the third quarter of 2023, despite the decreased demand. The company projects total thermal coal sales volume of 62-68 million tons.

Arch Resources’ expectation for corporate capital expenditure is pegged at $150-$160 million for 2023.

Zacks Rank

Arch Resources 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

CONSOL Energy CEIX is scheduled to report second-quarter results on Aug 8, before market open. The Zacks Consensus Estimate for earnings is pegged at $4.43 per share, indicating a year-over-year increase of 29.5%.

The same for 2023 EPS stands at $20.24, implying a year-over-year improvement of 54.9%. CEIX delivered an average earnings surprise of 26.85% in the last four quarters.

Warrior Met Coal HCC is scheduled to report second-quarter results on Aug 2, after market close. The company has an Earnings ESP of +0.50%.

HCC delivered an average earnings surprise of 17.45% in the last four quarters.

Alliance Resource Partners ARLP is scheduled to report second-quarter results on Jul 31, before market open. The Zacks Consensus Estimate for second-quarter earnings is pegged at $1.27 per share, indicating a year-over-year increase of 3.3%.

The same for 2023 EPS is pinned at $5.56, implying a year-over-year improvement of 26.7%. ARLP delivered an average earnings surprise of 10.59% in the last four quarters.

Zacks Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.

This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Alliance Resource Partners, L.P. (ARLP) : Free Stock Analysis Report

Warrior Met Coal (HCC) : Free Stock Analysis Report

Arch Resources Inc. (ARCH) : Free Stock Analysis Report

Consol Energy Inc. (CEIX) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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