Alliance Resource Partners (ARLP) Beats Q3 Estimates, Raises 2025 Outlook

Alliance Resource Partners, L.P. (NASDAQ: ARLP) has released its financial results for the third quarter of 2025, showcasing robust performance and providing updated guidance for the remainder of the year. The company exceeded expectations in several key areas, reflecting its strategic investments and operational improvements.

Revenue Reaches $571 Million as Coal Volumes and Margins Improve

Alliance Resource Partners, L.P. demonstrated a strong financial performance in the third quarter of 2025, with revenues amounting to $571.4 million and net income reaching $95.1 million, or $0.73 per basic and diluted limited partner unit. These results exceeded expectations, as the anticipated earnings per share (EPS) were $0.67, and revenue was projected at $563.74 million. The company’s adjusted EBITDA also saw a notable increase of 14.8% compared to the previous quarter, reaching $185.8 million. This growth was driven by higher coal sales volumes and prices, contributing to a revenue increase of 4.4% sequentially.

Compared to the same quarter in 2024, the company’s net income rose by 10.2%, despite a 6.9% decline in total revenues. This decrease in revenue was primarily due to lower coal sales prices and reduced transportation revenues. However, the company managed to offset these declines with increased coal sales volumes and reduced operating expenses. The coal sales volumes rose by 3.9% year-over-year, reaching 8.7 million tons in the third quarter of 2025, compared to 8.4 million tons in the same period the previous year.

The company’s operational improvements were evident in the Appalachia segment, where the adjusted EBITDA expense per ton improved by 11.7% year-over-year and 12.1% sequentially. The Illinois Basin operations also saw a 10.8% increase in tons sold compared to the third quarter of 2024. These improvements highlight the effectiveness of strategic investments in infrastructure and equipment, which have begun to yield positive results, contributing to the company’s overall financial success in the quarter.

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ARLP Maintains Positive Outlook with Strong Contract Pipeline

Looking ahead, Alliance Resource Partners, L.P. has provided an optimistic outlook for the remainder of 2025, tightening its guidance ranges for coal sales volumes and per ton expenses. The company expects its operating and financial results for the fourth quarter to match the impressive performance of the third quarter. The updated guidance reflects steady operational execution and continued cost improvements across its mining operations.

In the oil and gas royalties segment, the company has adjusted its BOE volume guidance to account for the timing of a multi-well pad in the Delaware Basin, now anticipated to come online in early 2026. The company has also reported significant contracting momentum, with 29.1 million tons committed and priced for 2026, reflecting a 9% increase from the previous quarter. This strong contracting activity is driven by domestic customer engagement and the normalization of utility stockpiles, supporting robust term contracting activity and greater demand visibility.

Alliance Resource Partners, L.P. is well-positioned to capitalize on improving market fundamentals, completed capital programs driving cost reductions, and a strong balance sheet. Despite potential short-term impacts from declining oil prices, the company anticipates that improved natural gas forward curves and increased utility demand will partially offset these declines and benefit coal demand in the coming year. The company remains confident in its ability to meet market demand and increase production at its Tunnel Ridge and Illinois Basin operations in 2026, supported by projected growth in electricity demand and strategic investments in energy and infrastructure.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.