Warrior Met Coal Q3 Revenue Jumps 55% on Blue Creek Ramp-Up

Warrior Met Coal (NYSE: HCC) reported a sharp increase in third-quarter 2026 earnings and cash flow as the ramp-up of its Blue Creek mine expanded sales volumes and profitability. The steelmaking coal producer also reaffirmed its full-year volume and cost guidance, while declaring a $2.00-per-share special dividend alongside its regular quarterly dividend.

Revenue for the three months ended September 30 rose 55% year over year to $507.9 million. Net income increased 35% to $49.3 million, or $0.93 per diluted share, from $36.6 million, or $0.70 per share, in the comparable 2025 quarter.

Adjusted EBITDA, a non-GAAP measure, climbed 76% to $124.0 million. The adjusted EBITDA margin widened to 24.4% from 21.5%, reflecting higher steelmaking coal prices and a growing profit contribution from Blue Creek, according to the presentation.

Blue Creek drives higher volumes

Third-quarter sales volumes increased 48% to 3.49 million short tons, while production rose 36% to 3.05 million short tons. Warrior attributed the expansion primarily to Blue Creek, where longwall operations began in October 2025, eight months ahead of schedule.

The average net selling price increased 6% to $143.56 per short ton. Cash cost of sales on a free-on-board port basis rose 4% to $104.98 per short ton from $100.73 a year earlier.

Blue Creek produces premium High Vol A steelmaking coal and has annual nameplate capacity of approximately 7 million short tons. Warrior said customer reception of the product has remained positive. The company completed the project ahead of schedule and within its spending guidance, with final cumulative project expenditures of $1.03 billion.

For the first nine months of 2026, Warrior recorded sales of 10.15 million short tons and production of 9.90 million short tons, increases of 50% and 45%, respectively. Nine-month revenue rose 59% to $1.48 billion, while net income reached $209.1 million, compared with $34.0 million a year earlier.

Year-to-date adjusted EBITDA increased to $424.3 million from $163.7 million. Cash cost of sales declined 6% to $97.89 per short ton, with the lower-cost structure of Blue Creek and a benefit from the Section 45X Advanced Manufacturing Production Tax Credit partly offset by higher transportation and royalty expenses in a stronger pricing environment.

Cash flow and liquidity strengthen

Warrior generated $166.0 million of cash from operating activities during the quarter. Free cash flow was $138.9 million, reversing negative free cash flow of $19.5 million in the prior-year period, as capital spending fell following completion of the main Blue Creek construction program.

At September 30, the company had $437.1 million of cash and cash equivalents and $140.5 million available under its asset-based revolving credit facility, providing total liquidity of $577.6 million. Long-term debt totaled $154.8 million, while finance lease obligations were $77.6 million. Warrior reported consolidated net cash of $204.7 million and a non-GAAP net leverage ratio of negative 0.40 times trailing 12-month adjusted EBITDA.

The board declared a special cash dividend of $2.00 per share in addition to the regular quarterly dividend of $0.08 per share.

Full-year outlook reaffirmed

Warrior reaffirmed its full-year 2026 guidance as updated in the second quarter. The company continues to expect coal sales of 13 million to 14 million short tons and production of 12.5 million to 13.5 million short tons. Non-GAAP cash cost of sales is projected at $95 to $105 per short ton on a free-on-board port basis.

Capital expenditures are expected to total $155 million to $190 million, including $105 million to $115 million for sustaining investment at existing mines and $50 million to $75 million for Blue Creek. Through September, total capital spending was $136 million, including $65 million of sustaining expenditures and $71 million for Blue Creek.

The outlook remains exposed to changes in global steelmaking coal demand and pricing, trade and tariff uncertainty, inflation and geopolitical developments. Warrior also identified operational, geological, labor and weather risks, as well as rail performance and potential disruptions at the McDuffie Terminal at the Port of Mobile, as factors that could affect production, shipments, costs and cash generation.