Arch Resources stock rallies into record territory after profit misses but revenue beats by wide margin

Shares of Arch Resources Inc. climbed 1.5% toward a record high in morning trading Tuesday, but pared earlier gains of as much as 10.5%, after the coal producer reported a fourth-quarter profit that missed expectations but revenue that more than doubled and was well above forecasts, and said it planned to restart its variable shareholder return program in the second quarter. The company swung to net income of $226.6 million, or $11.92 a share, from a loss of $78.5 million, or $5.17 a share, in the year-ago period, but that missed the FactSet consensus for earnings per share of $12.90. Revenue rose 123.4% to $805.7 million, beating the FactSet consensus of $715.1 million. The company plans a capital allocation model that returns 50% of the prior quarter's discretionary cash flow to shareholders by way of a variable cash dividend in conjunction with its existing fixed cash dividend. The last fixed dividend paid was 25 cents a share. The company plans to use the remaining 50% of the prior quarter's cash flow for share buybacks, special dividends, the repurchase of potentially dilutive securities and/or capital preservation. The stock has now run up 41.1% over the past three months while the S&P 500 has lost 4.8%.

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