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ARLP Q3 Earnings Beat Estimates on Higher Volumes, Lower Costs
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Key Takeaways
ARLP's Q3 earnings surged to $1.10 per unit, beating estimates by 34.15%, while revenues rose 5.5% to $603M.
Coal sales volumes rose 7.4%, while per-ton expenses fell 13.1%, boosting coal operations EBITDA by 18.6%.
Oil and gas royalty revenues rose 86.4%, while Alliance Resource raised its 2026 coal sales volume outlook.
Alliance Resource Partners, L.P. (ARLP - Free Report) reported third-quarter 2026 earnings of $1.10 per unit, beating the Zacks Consensus Estimate of 82 cents by 34.15%. Earnings increased from 73 cents per unit in the year-ago quarter.
Total Revenues
Total revenues were $603 million, surpassing the Zacks Consensus Estimate of $589 million by 2.38%. Revenues increased 5.5% year over year, driven by record oil and gas royalty revenues, higher coal sales volumes and increased other revenues, partially offset by lower coal sales prices. Coal sales volumes increased 7.4% year over year to 9.348 million tons.
Coal sales revenues totaled $504.2 million in the reported quarter, declining 1.5% from $511.6 million in the year-ago period. Oil and gas royalty revenues increased 86.4% year over year to $59.8 million.
Other revenues increased to $28.8 million from $20 million a year ago. Transportation revenues were $10.3 million compared with $7.7 million in the prior-year quarter.
Alliance Resource Partners, L.P. Price, Consensus and EPS Surprise
Coal Operations segment adjusted EBITDA increased 18.6% year over year to $186.8 million, primarily driven by higher Illinois Basin volumes and lower per-ton operating expenses.
The average coal sales price declined 8.3% year over year to $53.93 per ton. However, segment-adjusted EBITDA expense per ton decreased 13.1% to $35.64, reflecting improved operating efficiency.
Illinois Basin coal sales volumes increased 6.4% year over year to 7.033 million tons, benefiting from the resumption of longwall production at Hamilton. Segment-adjusted EBITDA increased 32.6% to $139.8 million.
Appalachia coal sales volumes increased 10.7% to 2.315 million tons on strong sales at Tunnel Ridge. However, segment-adjusted EBITDA declined 10.4% to $48.5 million, reflecting weaker coal pricing.
ARLP's Royalty Business Delivers Strong Growth
Total royalty revenues increased 52.5% year over year to $87.5 million. Segment-adjusted EBITDA increased 40% to $61.8 million.
Oil and gas royalty volumes increased 61.3% year over year to 1.450 million barrels of oil equivalent, primarily reflecting the AllDale III and IV acquisition. The average realized price increased 15.5% to $41.21 per barrel of oil equivalent.
Coal royalty volumes rose 18.4% to 8.350 million tons, benefiting from higher volumes at Tunnel Ridge and Hamilton. Coal Royalties segment adjusted EBITDA increased 6.2% to $18.2 million.
Highlights of the Release
Operating expenses, excluding depreciation, depletion and amortization, declined 4.4% year over year to $339.2 million. General and administrative expenses increased 26.8% to $27.1 million.
Depreciation, depletion and amortization expenses increased 5.2% year over year to $82.3 million. Interest expenses, net, rose to $15.8 million from $11 million in the year-ago quarter.
Alliance Resource's Profitability and Cash Flow
Net income increased 46.8% year over year to $139.6 million. Adjusted EBITDA rose 26.3% to $233.9 million, supported by stronger coal operations, acquisitions and increased equity method investment income.
Distributable cash flow was $136.8 million, increasing approximately 29% year over year. The distribution coverage ratio improved to 1.76 times, reflecting stronger cash generation.
ARLP's Financial Position
Cash and cash equivalents were $84.8 million as of Sept. 30, 2026, compared with $71.2 million at 2025-end.
Total debt and finance leases outstanding were $679.9 million. Total liquidity was $430.8 million, including $346 million available under revolving credit and receivables securitization facilities.
The partnership declared a quarterly cash distribution of 60 cents per unit, payable Nov. 13, 2026, to unitholders of record as of Nov. 6.
Alliance Resource Updates 2026 Guidance
Alliance Resource updated its 2026 coal sales volume guidance to 34.5-35.5 million tons, raising the midpoint of the previous projection. The company expects average coal sales prices of $54.25-$54.75 per ton.
Segment-adjusted EBITDA expense per ton is projected between $37.50 and $38.50. Total capital expenditures are expected in the range of $270-$290 million.
The partnership has 35 million tons committed and priced for 2026 and 31.7 million tons for 2027. Management expects growing electricity demand and additional export opportunities to support its coal business.
The company also expects its oil and gas royalty operations to benefit from the full-year contribution of acquired mineral interests in 2027.
The Zacks Consensus Estimate for Ramaco Resources' (METC - Free Report) third-quarter is pegged at a loss of 26 cents per share. The estimate for total revenues is pinned at $143.8 million.
The consensus estimate for Ramaco Resources' 2026 and 2027 revenues indicates year-over-year growth of 7.23% and 18.98%, respectively.
The Zacks Consensus Estimate for SunCoke Energy's (SXC - Free Report) third-quarter earnings is pegged at 11 cents per share. The estimate for total revenues is pinned at $436 million.
The consensus estimate for Suncoke Energy's 2026 and 2027 revenues implies year-over-year decline of 2.3% and 7.7%, respectively.
The Zacks Consensus Estimate for Warrior Met Coal's (HCC - Free Report) third-quarter earnings is pegged at $1.50 per share. The estimate for total revenues is pinned at $494 million.
The consensus estimate for Warrior Met Coal's 2026 and 2027 revenues indicates year-over-year growth of 52.1% and 14.4%, respectively.
View the Zacks #1 Rank List
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ARLP Q3 Earnings Beat Estimates on Higher Volumes, Lower Costs
Key Takeaways
Alliance Resource Partners, L.P. (ARLP - Free Report) reported third-quarter 2026 earnings of $1.10 per unit, beating the Zacks Consensus Estimate of 82 cents by 34.15%. Earnings increased from 73 cents per unit in the year-ago quarter.
Total Revenues
Total revenues were $603 million, surpassing the Zacks Consensus Estimate of $589 million by 2.38%. Revenues increased 5.5% year over year, driven by record oil and gas royalty revenues, higher coal sales volumes and increased other revenues, partially offset by lower coal sales prices. Coal sales volumes increased 7.4% year over year to 9.348 million tons.
Coal sales revenues totaled $504.2 million in the reported quarter, declining 1.5% from $511.6 million in the year-ago period. Oil and gas royalty revenues increased 86.4% year over year to $59.8 million.
Other revenues increased to $28.8 million from $20 million a year ago. Transportation revenues were $10.3 million compared with $7.7 million in the prior-year quarter.
Alliance Resource Partners, L.P. Price, Consensus and EPS Surprise
Alliance Resource Partners, L.P. price-consensus-eps-surprise-chart | Alliance Resource Partners, L.P. Quote
Alliance Resource's Coal Operations Performance
Coal Operations segment adjusted EBITDA increased 18.6% year over year to $186.8 million, primarily driven by higher Illinois Basin volumes and lower per-ton operating expenses.
The average coal sales price declined 8.3% year over year to $53.93 per ton. However, segment-adjusted EBITDA expense per ton decreased 13.1% to $35.64, reflecting improved operating efficiency.
Illinois Basin coal sales volumes increased 6.4% year over year to 7.033 million tons, benefiting from the resumption of longwall production at Hamilton. Segment-adjusted EBITDA increased 32.6% to $139.8 million.
Appalachia coal sales volumes increased 10.7% to 2.315 million tons on strong sales at Tunnel Ridge. However, segment-adjusted EBITDA declined 10.4% to $48.5 million, reflecting weaker coal pricing.
ARLP's Royalty Business Delivers Strong Growth
Total royalty revenues increased 52.5% year over year to $87.5 million. Segment-adjusted EBITDA increased 40% to $61.8 million.
Oil and gas royalty volumes increased 61.3% year over year to 1.450 million barrels of oil equivalent, primarily reflecting the AllDale III and IV acquisition. The average realized price increased 15.5% to $41.21 per barrel of oil equivalent.
Coal royalty volumes rose 18.4% to 8.350 million tons, benefiting from higher volumes at Tunnel Ridge and Hamilton. Coal Royalties segment adjusted EBITDA increased 6.2% to $18.2 million.
Highlights of the Release
Operating expenses, excluding depreciation, depletion and amortization, declined 4.4% year over year to $339.2 million. General and administrative expenses increased 26.8% to $27.1 million.
Depreciation, depletion and amortization expenses increased 5.2% year over year to $82.3 million. Interest expenses, net, rose to $15.8 million from $11 million in the year-ago quarter.
Alliance Resource's Profitability and Cash Flow
Net income increased 46.8% year over year to $139.6 million. Adjusted EBITDA rose 26.3% to $233.9 million, supported by stronger coal operations, acquisitions and increased equity method investment income.
Distributable cash flow was $136.8 million, increasing approximately 29% year over year. The distribution coverage ratio improved to 1.76 times, reflecting stronger cash generation.
ARLP's Financial Position
Cash and cash equivalents were $84.8 million as of Sept. 30, 2026, compared with $71.2 million at 2025-end.
Total debt and finance leases outstanding were $679.9 million. Total liquidity was $430.8 million, including $346 million available under revolving credit and receivables securitization facilities.
The partnership declared a quarterly cash distribution of 60 cents per unit, payable Nov. 13, 2026, to unitholders of record as of Nov. 6.
Alliance Resource Updates 2026 Guidance
Alliance Resource updated its 2026 coal sales volume guidance to 34.5-35.5 million tons, raising the midpoint of the previous projection. The company expects average coal sales prices of $54.25-$54.75 per ton.
Segment-adjusted EBITDA expense per ton is projected between $37.50 and $38.50. Total capital expenditures are expected in the range of $270-$290 million.
The partnership has 35 million tons committed and priced for 2026 and 31.7 million tons for 2027. Management expects growing electricity demand and additional export opportunities to support its coal business.
The company also expects its oil and gas royalty operations to benefit from the full-year contribution of acquired mineral interests in 2027.
Zacks Rank
Alliance Resource currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Upcoming Coal Releases
The Zacks Consensus Estimate for Ramaco Resources' (METC - Free Report) third-quarter is pegged at a loss of 26 cents per share. The estimate for total revenues is pinned at $143.8 million.
The consensus estimate for Ramaco Resources' 2026 and 2027 revenues indicates year-over-year growth of 7.23% and 18.98%, respectively.
The Zacks Consensus Estimate for SunCoke Energy's (SXC - Free Report) third-quarter earnings is pegged at 11 cents per share. The estimate for total revenues is pinned at $436 million.
The consensus estimate for Suncoke Energy's 2026 and 2027 revenues implies year-over-year decline of 2.3% and 7.7%, respectively.
The Zacks Consensus Estimate for Warrior Met Coal's (HCC - Free Report) third-quarter earnings is pegged at $1.50 per share. The estimate for total revenues is pinned at $494 million.
The consensus estimate for Warrior Met Coal's 2026 and 2027 revenues indicates year-over-year growth of 52.1% and 14.4%, respectively.