Earnings Call Insights: Alpha Metallurgical Resources (AMR) Q3 2025
Management View
- CEO Charles Eidson highlighted, “This morning, we announced our financial results for the third quarter, which include adjusted EBITDA of $41.7 million and 3.9 million tons shipped. It was another good quarter for our team. Similar to Q2, the highlight of the period is the outstanding performance on cost of coal sales. For the second quarter, we missed a sub-$100 level by only $0.07. In Q3, we were able to shave almost another $3 off the prior quarter level, coming in at $97.27 per ton. We’re proud to have posted the best cost of coal sales performance for the company since 2021 and back-to-back quarters.”
- Eidson stated the company is “in the process of planning for 2026, putting together budgets and anticipating what we believe could be another challenging year for the coal industry,” and is not ready yet to issue guidance for 2026, citing ongoing domestic negotiations.
- CFO Todd Munsey reported, “Adjusted EBITDA for the third quarter was $41.7 million, down from $46.1 million in the second quarter. We sold 3.9 million tons in Q3, same amount as in Q2. Met segment realizations decreased quarter-over-quarter and average realization of $114.94 in the third quarter, down from $119.43 in Q2. Export met tons priced against Atlantic indices and other pricing mechanisms in the third quarter realized $107.25 per ton, while export coal priced on Australian indices realized $106.39 per ton.”
- Munsey added, “SG&A, excluding noncash stock compensation and nonrecurring items increased to $13.2 million for the third quarter as compared to $11.9 million in the second quarter. CapEx For the quarter was $25.1 million, down $34.6 million in Q2.”
- President & COO Jason Whitehead reported, “Q3 marks the second quarter in a row of record quarterly cost performance since 2021 at $97.27 per ton,” and noted continued progress at the Kingston Wildcat mine, with development production underway and expectations to reach a full annual run rate of roughly 1 million tons within 2026.
- Executive VP & Chief Commercial Officer Daniel Horn discussed market volatility, stating, “As steel demand remains subdued, metallurgical coal markets experienced slight fluctuations during the third quarter but have been largely range bound over the prior 6-month period.”
Outlook
- The company is not yet issuing 2026 guidance, pending completion of domestic sales negotiations and greater visibility on next year’s market.
- Munsey stated, “With additional visibility into remaining payments for the year, we are lowering our capital contributions to equity affiliates guidance to a range of $35 million to $41 million, down from the prior range of $44 million to $54 million.”
- At the midpoint of guidance, 85% of metallurgical tonnage in the met segment is committed and priced at an average price of $122.57, with another 13% committed but not yet priced.
Financial Results
- Adjusted EBITDA for Q3 was $41.7 million, with 3.9 million tons sold.
- Met segment realizations averaged $114.94 per ton, with export met tons at $107.25 per ton and export coal priced on Australian indices at $106.39 per ton.
- Cost of coal sales for the met segment decreased to $97.27 per ton in Q3.
- SG&A (excluding certain items) increased to $13.2 million.
- CapEx for Q3 was $25.1 million.
- As of September 30, unrestricted cash was $408.5 million, with $49.4 million in short-term investments and total liquidity of $568.5 million.
- Cash provided by operating activities was $50.6 million in Q3.
Q&A
- Nick Giles, B. Riley Securities: Asked about sustainability of cost cuts and productivity if prices shift. Eidson responded, “there’s going to be some volatility quarter-to-quarter… But I would just pause for a moment to again congratulate the operations team… Jason and his crew have done an amazing job over the past several quarters, continually ratcheting those costs down while maintaining our safe production mantra.”
- Giles asked about precedent for domestic contract volume swings. Horn replied, “A lot of it is in the our customers. They are — the steel industry in North America is not running at full capacity… I would guess it’s going to be similar to last year… I can’t really comment on a 1 million-ton swing, that seems like a lot. But until we’re through the negotiations, I really can’t say any more than that.”
- Giles inquired about rare earth opportunities. Eidson said, “We actually have done work going back to 2014… We’re not under any illusion that any of this is going to drive any material economic impact… we’re pretty happy mining metallurgical coal and if something else pops up, that will be great, but that’s really not our strategic intent at this moment.”
- Nathan Martin, The Benchmark Company: Asked about the CSX derailment impact. Horn replied, “the good news is we learned this morning that the first trains have moved through that area. So we expect this to be a relatively short duration. We have coal on the ground. We were able to continue loading vessels, move some things around.”
- Martin asked about domestic contract negotiations and spot activity. Horn stated, “Generally, Nate, the domestic customers all want to do fixed price 1-year contracts. So there’s not a lot of spot activity in that market.”
- Martin discussed market conditions and supply. Horn responded, “new mines come online and old mines go offline. It’s not new. So we’ll navigate it. We’re watching it closely.”
- Matthew Kline, Bank Texas Capital: Asked about index spreads and CapEx for 2026. Horn said, “the relativities between the 2 are driven by obviously supply and demand… What we’re more hoping for and expecting is some increase in demand in ’26.” Eidson added, “the only project that we have ongoing is… Kingston Wildcat mine… There’ll probably be another $40 million-ish to wrap that project up next year.”
- Giles also asked about M&A and safety. Eidson noted, “Job 1 is always… protect a franchise, maintain this as much of a cash cushion as we can during these more difficult markets… M&A right now, pretty tough in this landscape.” On safety, “The team has really responded and recovered. September was the best safety month we’ve had this year and maybe, gosh, going back years.”
Sentiment Analysis
- Analysts pressed on cost sustainability, contract negotiations, and market volatility, reflecting a neutral to slightly negative tone, particularly regarding market uncertainty and contract timing.
- Management maintained a confident tone in prepared remarks, highlighting operational achievements and cost control, but shifted to a more cautious and measured stance in Q&A, especially regarding future guidance and market risks. Eidson emphasized, “we do think it is going to be — continue to be a protracted situation through next year, at least it feels like.”
- Compared to the previous quarter, management’s tone remains focused on cost discipline but with increased caution about the external environment and forward visibility.
Quarter-over-Quarter Comparison
- Costs improved further in Q3, with cost of coal sales per ton declining from $100.06 to $97.27 and met segment realizations decreasing from $119.43 to $114.94 per ton.
- Liquidity increased slightly, while CapEx and adjusted EBITDA declined compared to Q2.
- Guidance is now more cautious with no new 2026 outlook, whereas Q2 included updates and optimism around Section 45X benefits.
- Analysts continued to focus on cost control and contract volumes, but also raised more questions this quarter about market uncertainty and contract timing.
- Management’s confidence in cost control is steady, while acknowledging market headwinds more explicitly than last quarter.
Risks and Concerns
- Management cited ongoing softness in metallurgical coal indexes, global economic uncertainty, and subdued steel demand as key risks.
- Delayed domestic contract negotiations for 2026 and potential market share competition from new supply entrants were noted.
- A recent train derailment posed a logistical risk, but was being addressed through alternative shipping and existing stockpiles.
- Management is closely monitoring CapEx, cash balances, and remains cautious on M&A due to market conditions.
Final Takeaway
Alpha Metallurgical Resources delivered another quarter of record-low cost performance, achieving $97.27 per ton and demonstrating disciplined operations amid persistent market challenges. With the Kingston Wildcat mine progressing and a significant portion of 2025 tonnage already committed, the company remains cautious about 2026, citing ongoing contract negotiations and a volatile market outlook. Management’s focus is on maintaining cost controls, safeguarding liquidity, and advancing operational efficiency as the coal industry navigates a period of subdued steel demand and economic uncertainty.