NASDAQ:ARLP

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Alliance Resource Partners Rises 2% as Q3 Earnings, Coal Volumes and Royalty Revenue Strengthen

Alliance Resource Partners (NASDAQ: ARLP) shares rose about 2% after the company reported stronger third-quarter 2026 earnings, improved coal operating costs and record oil and gas royalty revenue.

Revenue increased 5.5% year over year to $603.0 million, while net income attributable to ARLP jumped 46.8% to $139.6 million. Adjusted EBITDA attributable to ARLP rose 26.3% to $233.9 million, supported by stronger coal operations, contributions from the AllDale III & IV acquisition and higher equity-method investment income.

Coal operations improved meaningfully during the quarter. Segment Adjusted EBITDA rose 23.1% sequentially to $186.8 million, while Adjusted EBITDA expense per ton sold declined 13.1% year over year. The company also added 4.2 million committed and priced tons through 2028 and now has 31.7 million tons contracted for 2027.

Oil and gas royalties were another major growth driver. Segment Adjusted EBITDA attributable to ARLP reached $43.6 million, up 61.4% year over year, helped by $223.5 million of acquisitions completed during the quarter.

Cash generation remained solid, with distributable cash flow of $136.8 million and a distribution coverage ratio of 1.76x. ARLP declared a quarterly cash distribution of $0.60 per unit, equivalent to $2.40 annualized.

The 2% gain appears to reflect the combination of stronger earnings, lower coal costs, growing contracted volumes and an expanding royalty business. Management also said elevated crude prices could support another record quarter for oil and gas royalties, while expecting 2027 results to compare favorably with 2026.
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Author
Global Finance News 10-26-26
Alliance Resource Partners Stock Rises 3% After Strong Q2 Earnings and Higher 2026 Guidance

Alliance Resource Partners (NASDAQ: ARLP) shares rose about 3% on Monday after the company reported stronger second-quarter earnings, record oil and gas royalty revenue, and improved cash flow metrics while updating its 2026 guidance.

ARLP reported second-quarter revenue of $551.6 million, up 0.7% year over year. Net income increased 33.9% to $79.6 million, or $0.61 per unit, while adjusted EBITDA rose 14.7% to $185.7 million.

The improvement was supported by higher coal sales volumes, record oil and gas royalty revenue, increased investment income, and the absence of a $25 million impairment charge recorded in the prior-year quarter. Coal sales volumes reached 8.6 million tons, up 8.9% sequentially, although average coal pricing declined 2.7%.

The company’s Oil & Gas Royalties segment was a major contributor to the quarter. Royalty revenue reached a record $46.3 million, up 30.5% from a year earlier, while segment adjusted EBITDA totaled $38 million. Management attributed the growth largely to stronger realized commodity prices.

Alliance also highlighted improved cash generation. Distributable cash flow reached $108.2 million, while the distribution coverage ratio increased to 1.39 times. Both measures improved 39% from the previous quarter.

The company declared a quarterly cash distribution of $0.60 per unit, equivalent to an annualized rate of $2.40. It also secured an additional 21.2 million tons of committed and priced coal sales covering deliveries from 2026 through 2031, strengthening longer-term revenue visibility.

Following the quarter, ARLP completed its $206.2 million acquisition of oil and gas mineral interests, adding approximately 48,500 net royalty acres. The transaction expands the company’s exposure to several U.S. energy basins, including the Permian and Haynesville, and is expected to be immediately accretive to free cash flow per unit.

Management said stronger productivity, lower costs and the return of the Hamilton mine to longwall production should support higher production and cash flow during the second half of 2026. The combination of rising earnings, stronger distribution coverage, record royalty revenue and improved guidance appears to have driven the positive reaction in ARLP shares.
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Author
European Investor 07-27-26