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Arch Resources (ARCH) Q3 Earnings & Sales Beat Estimates

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Arch Resources Inc. (ARCH - Free Report) reported third-quarter 2021 earnings of $4.92 per share, which surpassed the Zacks Consensus Estimate of $4.74 by 3.8%.

Total Revenues

Total revenues summed $594.4 million, beating the Zacks Consensus Estimate of $479 million by 24.1%.

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 2 million tons of coal, on par with the prior-year figure. It recorded cash margins worth $59.93 per ton compared with $6.26 in the year-ago quarter, primarily owing to higher sales price.

In the Thermal segment, the company sold 19 million tons of coal, up 25.8% from the prior-year figure of 15.1 million tons. It recorded a cash margin of $2.68 per ton compared with $2.08 in the prior-year period.

During the third quarter, Arch Resources commenced longwall operations of its Leer South mine. The company expects Leer South to continue with its steady ramp-up in production  throughout the fourth quarter of 2021 and reach peak-production levels in early 2022. With the addition of Leer South, Arch Resources is in the process of increasing its High-Vol A metallurgical output by an incremental 3 million tons, annually.

The board of directors of Arch Resources initiated a quarterly dividend of 25 cents to be paid out on Dec 15, 2021 to its shareholders of record on Nov 30, 2021.

Financial Highlights

Cash and cash equivalents as of Sep 30, 2021 were $189.7 million compared with $187.5 million on Dec 31, 2020.

Long-term debt as of Sep 30, 2021 was $416.5 million compared with $477.2 million at 2020 end.

Cash provided by operating activities in the first nine months of 2021 was $91.5 million compared with $55.9 million in the year-ago period.

Guidance

Arch Resources committed 7.2 million tons of coking coal volume for 2021. Total thermal coal committed for the current year is 66.5 million tons. The company expects total sales volume in the range of 70.2-74.6 million tons for the same period.

Arch Resources’ 2021 capex guidance is in the range of $220-$240 million.

Zacks Rank

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

Upcoming Releases

Peabody Energy (BTU - Free Report) is scheduled to release third-quarter 2021 results on Oct 28. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 47 cents per share.

CONSOL Energy Inc. (CEIX - Free Report) is scheduled to release third-quarter 2021 results on Nov 2. The Zacks  Consensus Estimate for earnings is pegged at 68 cents per share.

Warrior Met Coal, Inc. (HCC - Free Report) is scheduled to release third-quarter 2021 results on Nov 2. The Zacks Consensus Estimate for earnings is pegged at 56 cents per share.