Alliance Resource Partners (NASDAQ: ARLP) reported Q3 EPS of $0.21, $0.26 better than the analyst estimate of ($0.05). Revenue for the quarter came in at $355.65 million versus the consensus estimate of $357.65 million.

"As we expected, ARLP’s performance during the 2020 Quarter benefited from improved economic activity, increased coal demand and recovering oil & gas production volumes and prices," said Joseph W. Craft III, Chairman, President and Chief Executive Officer. "Our coal operations responded to increased customer requirements by successfully ramping up production to meet contractual commitments while effectively mitigating the impacts of COVID-19 through the enhanced health and safety protocols implemented earlier this year. Stronger commodity prices led oil & gas operators to bring previously shut-in wells back online and slowly resume drilling and completion of wells on our mineral interests. The continuing efforts of the entire organization to optimize cash flow, reduce working capital and control capital expenditures and expenses enhanced our financial position and liquidity. As a result, all of ARLP’s operating and financial metrics improved significantly during the 2020 Quarter."

Outlook

"Looking ahead, we remain cautiously optimistic," said Mr. Craft. "Our customers experienced strong coal burn during the 2020 Quarter and with a higher forward price curve for natural gas heading into the heating season, we currently estimate coal burn for the 2020 fourth quarter will be even better. As a result, we continue to expect total coal sales of approximately 28.0 million tons this year. Several utilities have recently issued solicitations seeking significant coal supply commitments for multi-year terms. ARLP currently has priced contract commitments for approximately 20.0 million tons in 2021 and, in anticipation of higher natural gas prices and improved energy demand, we are targeting total sales volumes for next year approximately 10.0% above 2020 levels."

Mr. Craft continued, "We currently anticipate results from our Minerals segment will improve modestly during the fourth quarter of 2020 as virtually all shut-in production on our acreage has been brought online and drilling and completion activity and commodity prices are expected to gradually recover. These favorable trends should be constructive for our operators as they establish their capital allocation and development plans for 2021. With our minerals strategically located in key basins, ARLP is well positioned to benefit from improved pricing for oil, natural gas and natural gas liquids and the increases in drilling and completion activity anticipated in 2021."

For earnings history and earnings-related data on Alliance Resource Partners (ARLP) click here.