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Natural Resource Partners LP (NRP) Down 6.3% Since Last 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 . Shares have lost about 6.3% 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 the most recent earnings report in order to get a better handle on the important drivers.

Natural Resource Q3 Earnings & Revenues Beat Estimates

Natural Resource Partners delivered third-quarter 2019 adjusted earnings of $1.69 per unit, which beat the Zacks Consensus Estimate of $1.23 by 37.4%.

Total Revenues

In the quarter, total revenues of $63.7 million beat the Zacks Consensus Estimate of $58 million by 9.8%. Also, the top line improved 9.5% from the year-ago quarter’s level.

The upside can be attributed to higher revenues in the Equity in earnings of Ciner Wyoming.

Highlights of the Release

The Coal Royalty and Other segment contributed 62.6% to total revenues in the third quarter.

Total operating expenses in the quarter declined 5% to $14.1 million from $14.8 million in the prior-year quarter. The improvement was caused by lower operating and maintenance as well as depreciation, depletion and amortization expenses.

Interest expenses declined 40.4% to $10.4 million from $17.5 million in the year-ago quarter.

Financial Condition

Natural Resource had cash and cash equivalents of $99.6 million as of Sep 30, 2019, down from $101.8 million as of Dec 31, 2018.

The partnership continues to lower outstanding debt levels. Long-term debt amounted to $490.4 million as of Sep 30, 2019, down from $557.6 million as of Dec 31, 2018.

Cash flow from operating activities in the first nine months of 2019 was $118 million, up from $107.5 million in first nine months of 2018.
 

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -18.1% due to these changes.

VGM Scores

At this time, Natural Resource Partners LP has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% 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. Notably, Natural Resource Partners LP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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