American Resources Corporation (AREC) reports fourth-quarter loss, delays revenue estimates

American Resources Corporation (AREC) came out with a quarterly loss of $0.11 per share versus the Zacks Consensus Estimate of a loss of $0.03. That compares to a loss of $0.18 per share a year earlier. These numbers were adjusted for one-time items.

This quarterly report represents an earnings surprise of -266.67%. A quarter ago, it was expected that this company would post a loss of $0.03 per share when it actually produced a loss of $0.07, delivering a surprise of -133.33%.

Over the last four quarters, the company has beaten consensus earnings per share estimates only once.

American Resources Corporation, which belongs to the Zacks Mining – Miscellaneous industry, posted revenues of $4.69 million for the quarter ended December 2022, missing the Zacks Consensus Estimate by 63.96%. This compares to last year’s revenue of $4.54 million. The company has failed to beat consensus revenue estimates over the last four quarters.

The sustainability of current share price movements based on recently released data and future earnings expectations will depend primarily on management’s commentary following the earnings conference call.

Year-to-date, shares of American Resources Corporation are up about 1.5% compared to the S&P 500 Index’s gain of 4.9%.

What’s next for American Resources Corporation?

Even though American Resources Corporation has underperformed the market this year, investors are wondering: What’s next for this stock?

There are no easy answers to this key question, but one reliable metric that can help investors address this issue is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarters, but also how those expectations have changed recently.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings report, the estimate revision trend for American Resources Corporation is mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the stock is expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the next quarters and the current fiscal year change in the coming days. The current consensus EPS estimate is $0.01 on revenue of $18.2 million for the coming quarter and $0.04 on revenue of $106.4 million for the current fiscal year.

Investors should be aware that industry prospects can also have a material impact on stock performance. In terms of the Zacks Industry Rank, Mining – Miscellaneous is currently in the bottom 42% of the 250+ Zacks industries. Our research shows that the top 50% of Zacks industries outperform the bottom 50% by a factor of more than 2 to 1.

Another company in the same industry, Newmont Corporation (NEM), has not yet released its results for the quarter ending March 2023.

The gold and copper mining company is expected to post quarterly earnings per share of $0.28 in its upcoming report, representing a year-over-year change of -59.4%. The consensus EPS estimate for the quarter has been revised 14.4% down to the current level over the last 30 days.

Newmont Corporation’s revenue is expected to be $2.85 billion, down 5.6% from the prior-year quarter.

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