Alliance Resource Partners (NASDAQ:ARLP) reported third-quarter earnings on Monday that exceeded analyst forecasts, driven by improved operational efficiency and stronger sales volumes. The company’s shares rose 4.5% in pre-market trading following the announcement.
Adjusted earnings came in at $0.73 per unit, beating the consensus estimate of $0.64. Revenue totaled $571.4 million, slightly above projections of $567.05 million, though down 6.9% from $613.6 million a year earlier.
Coal sales volumes increased 3.9% year over year to 8.7 million tons, while production rose 8.5% to 8.4 million tons. Despite a 7.5% drop in coal prices from the same period last year, Adjusted EBITDA grew 9.0% to $185.8 million thanks to lower operating costs and stronger investment income.
“Alliance delivered strong operational and financial performance in the third quarter, with results tracking in-line with our expectations,” said Joseph W. Craft III, Chairman, President and CEO. “The significant infrastructure investments we have made over the past three years are beginning to pay off.”
During the quarter, ARLP invested $22.1 million as part of a $25 million commitment in a limited partnership that indirectly owns a 2.7 GW coal-fired power plant. The investment aims to position the company to benefit from tightening power markets.
The company also declared a quarterly cash distribution of $0.60 per unit, equivalent to an annualized $2.40 per unit. Total liquidity at the end of the quarter stood at $541.8 million, including $94.5 million in cash and cash equivalents.