Why Alliance Resource Partners’s Stock Rose after Its 3Q16 Results

Alliance Resource Partners (ARLP) announced its 3Q16 earnings results before market hours on October 28, 2016. In this series, we’ll analyze the company’s 3Q16 results, compare the results with analyst expectations, and analyze the factors that caused deviation. We’ll also take a look at the management’s guidance, analyst expectations for 2016, and the outlook for the company.

Alliance Resource Partners (ARLP) posted strong earnings for the quarter ended September 30, 2016. The company’s adjusted EPS (earnings per share) came in at $0.93 against analysts’ consensus EPS estimate of $0.73.

ARLP’s stock price rose nearly 2% during the intraday trading session on October 28, 2016. Alliance Resource Partners’s strong operational performance during 3Q16, an upward revision of its fiscal 2016 guidance, and expected positive cash flows from its operations on the backdrop of challenging market conditions helped the stock to close on a high note.

On the day of ARLP’s earning release, its peers Cloud Peak Energy (CLD) and Westmoreland Coal Company (WLB) gained nearly 12% and 3%, respectively. Peabody Energy’s (BTUUQ) stock lost nearly 5% during the intraday trading session.

The broader coal market, tracked by the VanEck Vectors Coal ETF (KOL), closed nearly flat. The SPDR S&P 500 ETF (SPY) closed nearly unchanged.

The recent rally in coal and natural gas prices helped the stocks of major coal mining companies such as Cloud Peak Energy (CLD), Alliance Resource Partners (ARLP), and Westmoreland Coal Company (WLB) to recover from their February lows.

Next, we’ll look at Alliance Resource Partners’s coal shipments for 3Q16.