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Alliance Resource (ARLP) Q4 Earnings Meet, Revenues Miss

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Alliance Resource Partners, L.P. (ARLP - Free Report) reported fourth-quarter 2019 operating earnings of 20 cents per unit, which came in line with the Zacks Consensus Estimate.

Operating earnings plunged 47.4% from the year-ago reported bottom line of 38 cents per unit. This year-over-year decrease is primarily due to lower total revenues, partially offset by lower total operating expenses.

Total Revenues

Total revenues in the reported quarter were $453.3 million, lagging the Zacks Consensus Estimate of $463 million by 2.2% and also declining 14.8% from $531.8 million in the year-ago period.

The year-over-year decline in the top line was due to weak coal sales revenues resulting from contracted coal sales volumes and prices, partially offset by the addition of oil & gas royalty revenues in the fourth quarter.

 

 

Highlights of the Release

In the reported quarter, Alliance Resource sold 9.43 million tons of coal at an average sales price of $42.95 per ton compared with 10.46 million tons at an average sales price of $46.34 in fourth-quarter 2018.

Total operating expenses in the quarter under review were $417.4 million, decreasing 13.5% year over year.

Interest expenses were $12.04 million, increasing 25.9% year over year.

Segmental Details

Coal Operations: Adjusted EBITDA from this segment was $129.4 million, declining 29.8% year over year.

Minerals: Adjusted EBITDA from this segment was $14.6 million, skyrocketing 100% year over year.

Financial Update

Cash and cash equivalents as of Dec 31, 2019 were $36.5 million compared with $244.2 million at the end of 2018.

Long-term debt as of the same date was $768.2 million compared with $564 million at 2018-end.

Cash flows from operating activities for the year ended Dec 31, 2019 were $514.9 million compared with $694.3 million in the comparable period last year.

Guidance

For 2020, Alliance Resource expects oil & gas production to jump 52% from the current levels. Oil & gas royalties’ revenues and Segment Adjusted EBITDA are also expected to be 56% and 62% higher, respectively. The company anticipates total coal production in the range of 35.5 - 37.5 million short tons.

Net income for 2020 is projected in the band of $81 - $159 million and capital expenditures in the bracket of $165 - $190 million.

The company predicts 2020 revenues within $1.65 - $1.77 billion and EBITDA in the range of $465 - $540 million.

Zacks Rank

Alliance Resource Partners currently holds a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Peabody Energy Corporation BTU is set to release fourth-quarter earnings on Feb 5, 2020. The Zacks Consensus Estimate for the quarter to be reported stands at a loss of 93 cents per share.

CONSOL Energy Inc. CEIX is scheduled to release fourth-quarter earnings on Feb 11, 2020. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at 57 cents per share.

Warrior Met Coal, Inc. HCC is slated to release fourth-quarter earnings on Feb 19, 2020. The Zacks Consensus Estimate for the quarter to be reported is pegged at 21 cents per share.

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