Arch Resources (ARCH) Q4 Earnings Lag Estimates on Lower Volumes

Core Viewpoint - Arch Resources reported a significant decline in earnings per share for Q4 2023, missing estimates and showing a substantial year-over-year decrease in profitability [1][2]. Revenue Performance - Total revenues for Q4 2023 were $774 million, exceeding the Zacks Consensus Estimate of $654 million by 18.3%, but down 9.9% from $859 million in the same quarter last year [2]. - For the full year 2023, total revenues were $3.14 billion, reflecting a 15.6% decline from $3.72 billion in 2022 [2]. Segment Performance - In the Metallurgical segment, Arch sold 2.3 million tons of coal, consistent with the previous year, but cash margins decreased to $82.91 per ton from $93.15 [4]. - In the Thermal segment, coal sales were 15.5 million tons, down 3.7% from 16.1 million tons in the prior year, with cash margins dropping to $1.64 per ton from $3.85 [4]. Share Repurchase and Financial Position - The company repurchased approximately 20,000 shares for $3 million at an average price of $151.96 per share, with $217.7 million remaining under its $500 million share repurchase program as of December 31, 2023 [4]. - Cash and cash equivalents increased to $287.8 million from $236.1 million year-over-year, while long-term debt decreased to $105.2 million from $116.3 million [6]. Operational Cash Flow - Cash provided by operating activities for the year ended December 2023 was $635.3 million, down from $1.2 billion in the previous year [6]. Future Guidance - Arch Resources expects coking coal sales between 8.6 million and 9 million tons for 2024, with total thermal coal sales projected at 58.6 million to 65 million tons [7]. - The company anticipates corporate capital expenditures in the range of $160 million to $170 million for 2024 [7]. Market Expansion - Arch Resources has expanded its metallurgical segment by securing six new large Asian steelmaking customers in 2023, with nearly 40% of its total coking coal output shipped to the Asian market [5].