AMR shares climb on strong Q1 outlook despite Q4 earnings miss
Metallurgical coal producer expects deferred pricing benefits to boost first quarter results as global supply tightens
Alpha Metallurgical Resources shares rose 2.5% on Friday, defying a substantial fourth-quarter earnings miss, as investors focused on the metallurgical coal producer's optimistic outlook for the first quarter of 2026.
The Bristol, Tennessee-based company reported a preliminary net loss of $17.3 million, or $1.34 per diluted share for the fourth quarter of 2025, missing analyst expectations. Revenue of $519.1 million also fell short of consensus estimates of $543.8 million. The quarterly results included approximately $6 million in non-recurring costs related to mine recovery and idle expenses from the Rolling Thunder inundation.
Despite the disappointing fourth-quarter performance, Chief Executive Andy Eidson highlighted an improved pricing environment for metallurgical coal. "While the low-vol met coal indexes improved in the fourth quarter, the majority of that improvement did not occur until December," Eidson said, noting that the company is seeking opportunities to capitalize on improved market conditions.
The delayed pricing improvements provided the catalyst for the stock's advance. "Due to the late quarter timing of the pricing improvements, most of the related benefit was pushed into Q1 of 2026," Eidson explained. The average analyst estimate for first-quarter 2026 earnings per share stands at $8.81, according to MarketBeat data.
The positive outlook aligns with broader market trends in the metallurgical coal sector. Australian premium low-volatile hard coking coal prices reached a 17-month high of $227.38 per tonne in January, driven by significant supply disruptions in Queensland. Heavy rainfall and widespread flooding have severely impacted mining operations and logistics, with several major producers declaring force majeure on shipments and vessel congestion at Queensland ports reaching 108 vessels on January 20.
Alpha Metallurgical reported adjusted EBITDA of $28.5 million for the fourth quarter, with metallurgical coal sales totaling 3.8 million tons. The company's liquidity position remains robust at $524.3 million as of December 31, including $366 million in cash and cash equivalents.
The company has been actively returning capital to shareholders, repurchasing approximately 6.9 million shares for roughly $1.1 billion under its $1.5 billion board-authorized share repurchase program. With 12.85 million shares outstanding, the buybacks represent a significant reduction in the company's float.
Analyst sentiment around the stock showed mixed signals. Texas Capital Securities downgraded Alpha Metallurgical from Buy to Hold while simultaneously raising its price target to $210 from $185. The downgrade reflected concerns about limited valuation upside at current levels, with the stock trading at $219.19 when the rating change was announced.
The firm revised its adjusted EBITDA estimates downward, reducing its fourth-quarter 2025 projection to $36.9 million from $41 million and its fiscal year 2026 estimate to $307 million from $337.3 million. The reductions were primarily due to a lowered price deck for certain coal products.
Looking ahead, Alpha Metallurgical's full-year 2026 guidance, issued in December, projects total coal shipments between 15.1 and 16.5 million tons, with metallurgical coal accounting for 14.4 to 15.4 million tons. The company anticipates cost of coal sales between $95 and $101 per ton.
The final, audited fourth-quarter 2025 results are scheduled for release on February 27, 2026, which will provide additional clarity on the company's operational performance and the sustainability of the improved pricing environment.