NACCO Industries’ Earnings Call Reveals Mixed Sentiment

Nacco Industries, Inc. ((NC)) has held its Q3 earnings call. Read on for the main highlights of the call.

NACCO Industries’ recent earnings call presented a mixed sentiment, with notable improvements in operating profit, revenue, and segment growth, particularly in the Contract Mining and Minerals and Royalties segments. However, these positives were tempered by challenges in the Utility Coal Mining segment and a reduction in net income and EBITDA compared to the previous year, along with an anticipated decline in full-year operating profit.

Improved Operating Profit

The third quarter saw NACCO Industries achieve an operating profit of $7 million, a significant improvement from the breakeven result in the second quarter. This progress was also reflected in the EBITDA, which increased from $9.3 million in Q2 to $12.5 million in Q3, indicating a positive trend in profitability.

Contract Mining Segment Growth

The Contract Mining segment experienced robust growth, with tons delivered increasing by 20% year-over-year and 3% sequentially. The segment also secured long-term contracts and executed a profitable multiyear contract for dragline services in Florida, signaling strong future prospects.

Minerals and Royalties Segment Expansion

In a strategic move, the Minerals and Royalties segment completed a $4.2 million acquisition, expanding its mineral interests in the Midland Basin. This expansion is expected to contribute to full-year profitability by 2026, marking a significant step forward for the segment.

Revenue and Gross Profit Increase

NACCO Industries reported consolidated revenues of $76.6 million, marking a 24% increase year-over-year. Gross profit also saw a substantial improvement, rising by 38%, highlighting the company’s ability to enhance its financial performance.

Debt Reduction and Liquidity

The company made strides in reducing its debt, which decreased from $99.5 million at the end of 2024 to $80.2 million as of September 30, 2025. Total liquidity stood at $152 million, reflecting a strong financial position.

Reduced Net Income

Despite the positive developments, net income decreased from $15.6 million in 2024 to $13.3 million in 2025 Q3. This decline was primarily due to the absence of a $13.6 million insurance recovery from the previous year, which had bolstered past results.

Challenges in Utility Coal Mining

The Utility Coal Mining segment faced difficulties, with the Mississippi Lignite Mining Company experiencing reduced per ton sales prices due to contractual pricing mechanics, negatively impacting the segment’s results.

Decreased EBITDA Year-over-Year

The third quarter EBITDA was $12.5 million, a decrease from $25.7 million in the same period last year. This drop was mainly attributed to the absence of insurance recovery income from 2024, which had previously boosted earnings.

Expected Decline in Full-Year Operating Profit

NACCO Industries forecasts a decline in full-year operating profit compared to 2024, partly due to second quarter breakeven results and costs associated with the termination of their pension plan.

Forward-Looking Guidance

Looking ahead, NACCO Industries anticipates a substantial year-over-year decrease in net income and EBITDA for the fourth quarter and full year 2025, primarily due to a noncash settlement charge from terminating their pension plan and lower operating profit. However, the company expects meaningful improvements in both operating profit and net income in 2026, suggesting a positive outlook for the future.

In summary, NACCO Industries’ earnings call reflected a balanced sentiment, with significant achievements in operating profit and segment growth countered by challenges in certain areas. The company’s strategic moves and financial improvements position it well for future growth, despite some anticipated short-term declines.