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

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Arch Resources Inc. (ARCH - Free Report) 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 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 - Free Report) 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 - Free Report) 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 - Free Report) 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.

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