Warrior Met Coal ( NYSE: HCC ) -9.6% in Thursday's trading despite easily beating estimates for Q2 adjusted earnings and revenues , and declaring an $0.80/share special dividend on top of the regular $0.06 regular dividend.
Q2 net income of $297M, or $5.74 /share, was the company's third consecutive quarter of record quarterly net income and EPS, swinging from a net loss of $4.7M, or $0.09/share, in the year-ago quarter of 2021.
Q2 adjusted EBITDA of $431.2M also was a record quarterly high, compared to $65.2M in the prior-year period.
Warrior Met Coal ( HCC ) produced 1.7M short tons of met coal in Q2, compared to 1.2M st in the same quarter last year, and it guides for full-year coal sales of 5.5M-6.5M st.
Despite the strong Q2, BMO analysts believe the company is "entering a rougher patch," downgrading shares to Market Perform from Outperform with a $37 price target, cut from $45, noting metallurgical coal prices have plunged 72% since a March peak while HCC shares are down just 15%.
BMO's David Gagliano expects to see Warrior Met's ( HCC ) near-term results squeezed by meaningfully lower prices and stubbornly high costs, which along with higher capital spending will weigh on free cash flow generation.
Warrior Met Coal's ( HCC ) stock price return shows a 13% YTD gain and a 49% increase during the past year .
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Warrior Met Coal -10% despite Q2 beat; BMO says 'entering a rougher patch'