Alliance Resource Partners, L.P. (NASDAQ:ARLP) reported third-quarter 2026 earnings and revenue above analysts’ expectations, supported by increased contributions from its coal operations and oil and gas royalty business.
The US energy partnership reported adjusted earnings of $1.08 per unit, compared with the analyst consensus estimate of $0.85.
Quarterly revenue increased 5.5% year on year to $603.0 million, up from $571.4 million in the corresponding period of 2025. The result exceeded market expectations of $585.83 million.
Adjusted EBITDA attributable to Alliance Resource Partners rose 26.3% compared with the previous year, reaching $233.9 million.
The company’s units gained 3.03% following the earnings announcement.
Alliance Resource Partners reported improved financial performance across its coal operations during the third quarter.
The company said its coal operations segment adjusted EBITDA expense per ton sold declined 13.1% compared with the same period last year and decreased 7.9% from the preceding quarter.
The reductions in costs per ton contributed to the increase in consolidated adjusted EBITDA.
Operational activity included the resumption of longwall production at the Hamilton mining complex, alongside production and shipping activity at the River View and Tunnel Ridge operations.
The company also reported increased coal shipping activity during the quarter.
Joseph W. Craft III, Chairman, President and Chief Executive Officer of Alliance Resource Partners, commented on the operating results.
“We had an outstanding third quarter led by our Coal Operations’ strong shipping quarter combined with Hamilton being back on longwall production and River View and Tunnel Ridge operating well,” Craft said.
The comments reflect management’s assessment of the factors contributing to the partnership’s quarterly performance.
Alliance Resource Partners also reported record revenue and production volumes from its oil and gas royalty operations.
The company attributed part of the increase to acquisitions completed during the third quarter.
The partnership invested approximately $223.5 million in acquisitions during the period, expanding its interests in oil and gas royalty assets.
These transactions contributed to the development of the royalty business alongside its existing coal operations.
Oil and gas royalties provide the partnership with revenue linked to production from properties in which it holds royalty interests.
The reported increase in royalty revenue and volumes contributed to the overall growth in adjusted EBITDA attributable to ARLP.
The company did not provide a separate breakdown of the incremental quarterly revenue generated by the newly acquired assets in the supplied results.
Alliance Resource Partners declared a quarterly cash distribution of $0.60 per unit.
The payment represents an annualised distribution rate of $2.40 per unit, assuming the quarterly amount remains unchanged.
The distribution is scheduled to be paid on 13 November 2026.
The partnership reported a distribution coverage ratio of 1.76 times for the third quarter, representing a sequential improvement of more than 27%.
The coverage ratio measures the relationship between cash available for distributions and the amount distributed to unitholders.
The increase indicates that the partnership’s reported distribution coverage improved compared with the second quarter.
Future distributions remain subject to the partnership’s financial performance, cash requirements and distribution decisions.
Following its third-quarter results, Alliance Resource Partners updated its operating guidance for the full year.
The company now expects total coal sales volumes of between 34.50 million and 35.50 million tons in 2026.
Its forecast for the average coal sales price is between $54.25 and $54.75 per ton.
The revised guidance provides updated expectations for the partnership’s coal sales activity during the remainder of the year.
Coal sales volumes and realised prices are important factors in the financial performance of the partnership’s mining operations.
Actual results will depend on production levels, customer shipments and market conditions during the final quarter.
Alliance Resource Partners also provided updated full-year volume expectations for its oil and gas royalty business.
The company expects oil volumes of between 1.900 million and 2.000 million barrels during 2026.
Natural gas volumes are projected to range from 10.250 million to 10.750 million thousand cubic feet (MCF).
The forecasts reflect the partnership’s expectations for production associated with its royalty interests, including assets acquired during the year.
The actual volumes reported for the full year will depend on production activity across the underlying properties.
The company has not provided additional financial projections for the royalty business in the supplied announcement.
Alliance Resource Partners’ third-quarter results showed year-on-year increases in revenue and adjusted EBITDA, with both adjusted earnings per unit and revenue exceeding analysts’ estimates.
The partnership reported lower adjusted EBITDA expenses per ton sold in its coal operations, while its oil and gas royalty business recorded its highest reported quarterly revenue and volumes.
The $223.5 million of acquisitions completed during the quarter expanded the partnership’s royalty asset interests.
Alliance Resource Partners also declared a quarterly cash distribution of $0.60 per unit and reported an improvement in its distribution coverage ratio.
The updated full-year guidance establishes expectations for coal sales volumes, average coal pricing and oil and natural gas production.
Investors will be able to assess the partnership’s fourth-quarter performance against these forecasts, alongside developments in operating costs, commodity prices and cash generation.
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