Arch Resources Q3 Earnings Lag Estimates, Revenues Beat

Core Insights - Arch Resources, Inc. reported third-quarter 2024 earnings per share (EPS) of 41 cents, missing the Zacks Consensus Estimate of $1.38 by 70.3% and declining from $3.91 in the same quarter last year [1] - Total revenues were $617.9 million, exceeding the Zacks Consensus Estimate of $536 million by 15.3%, but down 17% from $744.6 million in the year-ago quarter [2] Segment Performance - In the Metallurgical segment, Arch sold 2.4 million tons of coal, an increase of 4.3% year-over-year, with cash margins at $21.74 per ton compared to $54.7 in the prior-year quarter [3] - In the Thermal segment, the company sold 13.8 million tons of coal, a decrease of 17.9% year-over-year, with cash margins at 86 cents per ton compared to $1.34 in the prior-year period [3] Operational Highlights - During the third quarter, Arch faced a three-week outage of the ship loader at Curtis Bay Terminal, which reduced coking coal shipments by approximately 200,000 tons [4] - The company paid down $5.1 million in debt, ending the quarter with a net cash position of $127.7 million [4] Strategic Moves - Arch announced plans to merge with CONSOL Energy Inc., aiming to create a leading global player in seaborne metallurgical and high-rank thermal coal markets, with expected annual cost savings and synergies of $110 million to $140 million [5] - The merger is anticipated to close by the end of the first quarter of 2025, pending customary closing conditions and stockholder approval [5] Financial Position - As of September 30, 2024, cash and cash equivalents and short-term investments totaled $219.6 million, down from $287.8 million as of December 31, 2023 [6] - Cash provided by operating activities in the first nine months of 2024 was $212.4 million, compared to $453.8 million in the same period last year [6] Market Position - Arch Resources currently holds a Zacks Rank of 5 (Strong Sell) [7]