Why Coking Coal Provider Arch Resources Shares Are Diving Today

Arch Resources Inc ARCH shares are trading lower after the company reported mixed fourth-quarter financial results.

Revenue of $774.0 million was down from $859.5 million in the prior-year quarter but above the consensus of $706.7 million.

Adjusted EBITDA fell to $180.0 million from $256.5 million a year ago. EPS of $6.07 missed the consensus of $7.35.

The core metallurgical segment witnessed coking coal sales volume of 2.0 million tons (vs. 2.1 million tons a year ago) and contributed to an adjusted EBITDA of $193.6 million in the quarter.

In Thermal segment, the company saw sales volumes of 15.5 million tons, with adjusted EBITDA of $26.7 million in the quarter.

The company generated an operating cash flow of $181.6 million and $126.5 million in discretionary cash flow in the quarter.

Arch Resources increased its cash and short-term investments by $107.0 million to $320.5 million and net cash position by $96.1 million to $178.4 million in the quarter.

Dividend: The board has declared a total quarterly cash dividend of $1.65 per share, payable on March 15, 2024, to stockholders of record as of February 29, 2024.

The company repurchased shares worth $3.0 million in the quarter. As of December 31, 2023, Arch had $217.7 million worth shares remaining authorization under its existing $500 million share repurchase program.

Paul A. Lang, Arch’s CEO and president, said, “Looking ahead to full-year 2024, we expect a step-up in coking coal production as well as another first-quartile cost performance. In addition, we anticipate another solid contribution from our thermal assets, supported by the return to normalized production levels at West Elk.”

Outlook: The company expects coking coal sales volume of 8.6 million to 9.0 million tons and thermal sales volume of 50.0 million-56.0 million tons in 2024.

Price Action: ARCH shares are down 6.57% at $162.15 on the last check Thursday.