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Why Is Natural Resource Partners LP (NRP) Down 7.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Natural Resource Partners LP (NRP - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Natural Resource Partners LP due for a breakout? Before we dive into how investors and analysts have reacted as 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 Q2 Earnings & Revenues Beat Estimates

Natural Resource Partners delivered second-quarter 2019 adjusted earnings of $2.74 per unit, which beat the Zacks Consensus Estimate of $1.42 by 92.96%.

Total Revenues

In the quarter, total revenues of $81.5 million beat the Zacks Consensus Estimate of $62 million by 32.47%. Also, the top line improved 17% from the year-ago quarter’s level.

The upside was driven by revenues in the higher Coal Royalty and Other segments as well as Transportation and processing services.

Highlights of the Release

The Coal Royalty and Other segment contributed 79.3% to total revenues in the second quarter.

Total operating expenses in the quarter rose 23.4% to $20.6 million from $16.7 million in the prior-year quarter. The uptick can be attributed to higher operating and maintenance as well as general and administrative expenses.

Interest expenses declined 29.7% to $12.4 million from $17.7 million in the year-ago quarter.

Financial Condition

Natural Resource had cash and cash equivalents of $70.8 million as of Jun 30, 2019, down from $101.8 million as of Dec 31, 2018.

The partnership continues to lower outstanding debt levels. Long-term debt was $498 million as of Jun 30, 2019, down from $557.5 million as of Dec 31, 2018.

Cash flow from operating activities in the first six months of 2019 was $76.2 million, up from $71.3 million in first six months of 2018.
 

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -7.52% due to these changes.

VGM Scores

Currently, Natural Resource Partners LP has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated 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 A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Natural Resource Partners LP has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.


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