ARCH - Arch Resources rallies to six-month high after easy Q4 earnings beat

Arch Resources ( NYSE: ARCH ) +10.3% in Thursday's trading to its highest in nearly six months after reporting Q4 GAAP earnings that crushed analyst expectations and declaring a $3.11/share quarterly cash dividend, which is equivalent to 50% of Q4 discretionary cash flow.

Q4 net income rose to $470.5M, or $23.18/share, from $226.6M, or $11.92/share, for the year-earlier, while revenues jumped 6.7% Y/Y to $859.5M.

Q4 adjusted EBITDA of $256.5M rose 15% Q/Q but fell 16% Y/Y; Arch ( ARCH ) finished FY 2022 with record adjusted EBITDA of $1.3B.

The company also said it ended FY 2022 with a net positive cash position of $95.8M, compared with a net debt position of $265.4M at the end of 2021.

Arch ( ARCH ) said it plans to deploy the remaining discretionary cash flow for use in stock buybacks, the repurchase of potentially dilutive securities, special dividends, and/or capital preservation.

Even with a small decline in average realization, Arch ( ARCH ) said its metallurgical segment achieved a 15% Q/Q increase in its per-ton cash margin during Q4, due largely to a 13% improvement in its average unit cost.

Arch ( ARCH ) expects coking coal shipments to remain relatively flat in Q1 2023, followed by incremental increases in subsequent quarters; overall coking coal sales volumes are seen totaling 8.9M-9.7M tons for FY 2023.

Arch Resources ( ARCH ) shares have gained 21% so far this year and 58% during the past year .

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