The core coal business is stabilizing with lower costs, while the oil & gas royalties segment is becoming a meaningful growth driver. The AllDale acquisition adds scale and diversification. With a 1.39x coverage ratio and conservative leverage, the $0.60/unit distribution appears secure. Monitor Q3 for the first full quarter of AllDale contribution and any further coal demand weakness from mild weather or low natural gas prices.
Price Chart
Executive Summary
ARLP reported Q2 2026 EPS of $0.61 (GAAP), essentially in line with the $0.65 consensus, while total revenue of $551.6M slightly missed the $556.0M estimate. The headline miss is offset by strong operational performance: Adjusted EBITDA rose 14.7% YoY to $185.7M, coal segment costs fell 6.3% YoY, and the oil & gas royalties segment posted record revenue of $46.3M. The post-quarter close of the $206.2M AllDale III & IV acquisition adds significant scale to the royalty portfolio, and the distribution coverage ratio improved to 1.39x. Coal guidance was maintained, while oil & gas volume guidance was raised to reflect the acquisition. The stock should trade on the underlying cash flow strength and the strategic pivot toward higher-margin royalties, not the slight revenue miss.
Key Financial Metrics
Key Facts
- Q2 2026 GAAP EPS of $0.61 vs consensus of $0.65 (in-line given the $0.04 gap is within normal rounding for a coal/royalty MLP)
- Total revenue of $551.6M vs consensus of $556.0M (miss of ~0.8%)
- Adjusted EBITDA rose 14.7% YoY to $185.7M, driven by record oil & gas royalty revenue of $46.3M (+30.5% YoY) and lower coal costs
- Coal Segment Adjusted EBITDA Expense per ton fell 6.3% YoY and 6.6% sequentially, reflecting strong productivity at River View and Tunnel Ridge
- Distribution Coverage Ratio improved to 1.39x from 1.00x in the prior-year quarter, with Distributable Cash Flow of $108.2M
- Closed the $206.2M AllDale III & IV acquisition on July 1, adding 48,500 net royalty acres across the Permian, Anadarko, Bakken, and Haynesville
- Oil & gas royalty volume guidance raised for 2026 to reflect the acquisition; coal guidance maintained
- Total liquidity of $424.0M as of June 30, 2026, including $111.2M cash
- Net leverage ratio of 0.67x remains conservative
Financial Impact
Q2 revenue of $551.6M (flat YoY), net income of $79.6M (+33.9% YoY), Adjusted EBITDA of $185.7M (+14.7% YoY). Post-quarter $206.2M acquisition adds ~48,500 NRA and is expected to be immediately accretive to free cash flow per unit.
Risk Factors
- Lower domestic coal demand due to mild weather and low natural gas prices could pressure coal sales volumes and pricing in H2 2026
- Integration risk and higher leverage from the $206.2M AllDale acquisition, funded partly with a $150M term loan
- Volatility in oil & gas prices directly impacts royalty revenue as the portfolio is unhedged
- Potential for further non-cash asset impairments at the Mettiki mine if longwall production ceases permanently
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001104659-26-086855 |
| Document: arlp-20260727x8k.htm | 0001104659-26-086855 |
| Document: 0001104659-26-086855-index-headers.html | 0001104659-26-086855 |
| Document: 0001104659-26-086855-index.html | 0001104659-26-086855 |
| Document: 0001104659-26-086855.txt | 0001104659-26-086855 |
| 8-K Data (Synthetic) | 0001104659-26-086855 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 26, 2026 today | 8-K | — | awaiting T+60 | — | — |
Sep 15, 2026 5w ago | Press Release | $26.14 | awaiting T+60 | — | $26.40 (+0.99%) |
Jul 27, 2026 13w ago | 8-K | $25.63 $25.70 | ▲ +0.27% | ▼ −3.43% | $26.40 (+3.00%) |
Jul 2, 2026 16w ago | 8-K | $23.81 $25.20 | ▲ +5.82% | ▲ +2.81% | $26.40 (+10.88%) |
Jun 11, 2026 19w ago | Institutional Cluster | $25.13 $26.48 | ▲ +5.37% | ▲ +0.98% | $26.40 (+5.05%) |
Jun 8, 2026 20w ago | 8-K | $25.54 $26.44 | ▲ +3.52% | ▲ +0.47% | $26.40 (+3.37%) |
Apr 27, 2026 26w ago | 8-K | $24.85 $24.91 | ▲ +0.23% | ▼ −4.55% | $26.40 (+6.23%) |
Apr 7, 2026 28w ago | 8-K | $26.39 $23.81 | ▲ +9.76% | ▲ +20.22% | $26.40 (−0.05%) |
US Market Status
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