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Natural Resource Partners (NRP) Down 14.1% Since Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Natural Resource Partners LP (NRP - Free Report) . Shares have lost about 14.1% in that time frame, underperforming the market.

Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Natural Resource Q1 Earnings, Revenues Miss Estimates

Natural Resource Partners LP reported first-quarter 2017 adjusted earnings of $0.03 per unit, missing the Zacks Consensus Estimate of $1.67 by 98.2%.

Total Revenue

In the quarter under review, Natural Resource Partners’ total revenue of $88.7 million lagged the Zacks Consensus Estimate of $89.5 million by 0.9%.

Excluding the gain on sale of assets in the first quarter of 2016, total revenue in the current quarter improved nearly 20% year over year.

Segment Details

Coal Royalty and Other segment revenues and other income in the reported quarter increased 29.6% to $51.2 million from $39.5 million reported in the year-ago quarter.

VantaCore segment revenues in the reported quarter were $27.2 million, up 10.1%.

Soda Ash segment revenues were up 5.1% to $10.3 million compared with the year-ago quarter.

Highlights of the Release

In the first quarter, the coal produced from its leased asset amounted to 8.43 million tons, up 4.1% from 8.1 million tons in the year-ago quarter. Thanks to the improvement in metallurgical coal prices, coal royalty revenues improved from the last-year period.

Total operating expense in the reported quarter was up 10.2% to $51.7 million from $46.9 million in the prior-year quarter.

Interest expenses increased 4.0% to $23.1 million from $22.2 million in the year-ago quarter.

Financial Condition

Natural Resource Partners had cash and cash equivalents of $112.9 million as of Mar 31, 2017, up from $40.4 million as of Dec 31, 2016.

Long-term debt was $707.4 million as of Mar 31, 2017, down from $987.4 million as of Dec 31, 2016.

In the quarter under review, cash from operating activities was $20.2 million, down 24.3% from $26.7 million in the prior-year period.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.

Natural Resource Partners LP Price and Consensus

VGM Scores

At this time, Natural Resource's stock has a poor Growth Score of 'F', however its momentum is doing a bit better with a 'C'. The stock was allocated also a grade of 'A' on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.

Zacks' style scores indicate that the company's stock is more suitable for value investors than momentum investors.

Outlook

The stock has a Zacks Rank #5 (Strong Sell). We expect below average returns from the stock in the next few months.




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