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Arch Resources (ARCH) Posts Narrower Q1 Loss, Beats on Sales

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Arch Resources Inc. (ARCH - Free Report) reported first-quarter 2021 operating loss of 40 cents per share, narrower than the Zacks Consensus Estimate of a loss of 79 cents. In the year-ago quarter, the company incurred a loss of $1.67 per share.

Total Revenues

Total revenues amounted to $357.5 million, which beat the Zacks Consensus Estimate of $316 million by 13.2%.

Arch Resources Inc. Price, Consensus and EPS Surprise

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 Resources sold 1.7 million tons of coal, down 5.6% from the prior-year figure of 1.8 million tons. It recorded cash margins of $24.13 per ton compared with $23.93 in the year-ago quarter, primarily due to higher sales price.

In the Thermal segment, cash margin was 98 cents per ton versus (24 cents) in the prior-year period.

During the first quarter, Arch Resources invested $60 million in the Leer South mine development, and expects to pump capital between $360 million and $390 million into the project for its completion. As of Mar 31, 2021, the company invested $342 million in the project. It is on track to commence longwall operations at the mine in third-quarter 2021. When fully operational, the mine is expected to produce up to 3 million tons of High-Vol A coking coal annually for sale in global metallurgical markets.

During the first quarter, the company issued $45.0 million in tax-exempt bonds, at a highly competitive interest rate of 4.125%. The proceeds are being used to fund the ongoing construction of the preparation plant and other waste management facilities at Leer South.

During the quarter, Arch Resources committed an additional 500,000 tons of metallurgical coal for delivery in 2021, bringing total commitments for the current year to 6.8 million ton.

Financial Highlights

Cash and cash equivalents as of Mar 31, 2021 were $169.6 million compared with $187.5 million on Dec 31, 2020.

Long-term debt as of Mar 31, 2021 was $519.4 million compared with $477.2 million at 2020-end.

Cash provided by (used in) operating activities in first-quarter 2021 was $5.7 million compared with ($12.1) million in the year-ago period.

Guidance

Arch Resources committed 6.8 million tons of coking coal volume for 2021. Total thermal coal committed for 2021 is 50.2 million tons. The company expects sales volume in the range of 57.4-62.2 million tons for 2021.

Zacks Rank

Arch Resources currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Release

Alliance Resource Partners, L.P. (ARLP - Free Report) is scheduled to release first-quarter 2021 results on Apr 26. The Zacks Consensus Estimate for the quarter’s earnings is pegged at 18 cents per unit.

Peabody Energy (BTU - Free Report) is scheduled to release first-quarter 2021 results on Apr 29. The Zacks Consensus Estimate for the bottom line for the quarter is pegged at a loss of 98 cents per share.

CONSOL Energy Inc. (CEIX - Free Report) is scheduled to release first-quarter 2021 results on May 4. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at 26 cents per share.

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