Alpha Metallurgical 2025 Q2 Earnings Sharp Drop in Net Income

Alpha Metallurgical (AMR) reported its fiscal 2025 Q2 earnings on August 8, 2025. The company significantly missed expectations with a steep drop in profitability, driven by a 31.4% year-over-year decline in revenue and a net loss. Management lowered cost of coal sales and SG&A guidance, while raising idle operations expense guidance. The report reflects ongoing challenges in the coal sector amid weak global demand.

Alpha Metallurgical reported a 31.4% year-over-year drop in revenue, with total revenue declining to $548.67 million in 2025 Q2 from $800.13 million in 2024 Q2. The firm’s primary revenue stream, coal, accounted for the vast majority of its earnings, generating $548.67 million in the quarter, while other revenue segments contributed $1.60 million. The substantial decline highlights the industry’s vulnerability to shifting market conditions and reduced demand.

The company swung to a net loss of $4.95 million in 2025 Q2, a 108.4% deterioration from the $58.91 million net income reported in the same period of 2024. On a per-share basis, earnings fell to a loss of $0.38 from a profit of $4.53, marking a similarly steep 108.4% negative change. The stark reversal underscores the pressures facing the coal sector and AMR’s ability to adapt.

The post-earnings price action review indicated a poor performance for a strategy of buying AMR shares following the report. The approach yielded a negative compound annual growth rate (CAGR) of -2.84% and an excess return of -58.33%, underperforming the benchmark return of 50.18%. The high maximum drawdown of 0.00% and a Sharpe ratio of -0.05 further emphasize the strategy’s high risk and losses.

CEO Charles Andrew Eidson highlighted operational improvements, including an adjusted EBITDA of $46.1 million and a 10% increase in productivity, which reduced labor and fixed costs. He noted that cost of coal sales fell by over $10 per ton quarter-over-quarter, marking the company’s best cost performance since 2021. Eidson acknowledged ongoing market headwinds, including weak steel demand and subdued global economic growth, but expressed cautious optimism that potential supply disruptions and Chinese overcapacity measures could improve the supply-demand balance. Strategic priorities include strengthening liquidity to $557 million, restarting the buyback program, and positioning the company for improved market conditions.

Alpha Metallurgical revised several financial guidance ranges. The company reduced its cost of coal sales guidance to $101–$107 per ton from $103–$110. SG&A guidance was also lowered to $48–$54 million from $53–$59 million, while idle operations expense guidance was raised to $21–$29 million from $18–$28 million. Net cash interest income guidance was increased to $6–$12 million from $2–$10 million. At the midpoint of guidance, 69% of metallurgical tonnage is committed and priced at $127.37 per ton, with the thermal byproduct portion fully committed at $80.52. Additionally, the One Big Beautiful Bill Act is expected to provide an annual tax credit benefit of $30–$50 million for met coal produced between 2026 and 2029.

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