NACCO Industries (NC) Q3 2026 Earnings Report

The call was broadly positive. NACCO reported strong third-quarter operating and adjusted EBITDA growth, improving contributions from newer contracts and investments, substantial contract mining momentum, and a favorable 2027 outlook. These positives were partly offset by solar project costs and uncertainty, lower reported net income and EPS, delayed customer payments, the loss of Sabine reclamation fees, near-term softness in portions of contract mining and Minerals and Royalties, and cash flow before financing remaining a use of cash in 2026.

NACCO expects utility coal mining operating profit to improve over last year in full year 2026, fourth quarter operating results to be lower than the prior year period, and overall coal demand to remain consistent with 2026 and profitability to improve in 2027; it expects contract mining substantial year over year growth in operating profit and segment adjusted EBITDA in both the fourth quarter and full year 2026, continued operating profit growth in 2027, and a full year of contributions from the Palm Beach County and Arizona contracts; Minerals and Royalties fourth quarter and full year operating profit and segment adjusted EBITDA are expected to be below the comparable 2025 periods, while in 2027 it expects meaningful earnings and cash flow although operating profit is expected to moderate from 2026 levels; Mitigation Resources is expected to generate a profit in the fourth quarter and in 2027, with 13 mitigation banking projects expected to generate credits generally 10 to 12 years; consolidated full year adjusted EBITDA is expected to show a substantial year over year increase, full year operating profit to be comparable to 2025 despite approximately $15 million of solar related impairment and curtailment costs, and income before income taxes and net income to increase year over year, while fourth quarter 26 net income is expected to increase year over year and consolidated operating profit and adjusted EBITDA could be lower than the prior year quarter depending on the timing of additional solar project curtailment costs; NACCO expects meaningful year over year improvements in operating profit net income and consolidated EBITDA in 2027, cash generated from operations to increase moderately in 2026, cash flow before financing to be a use of cash for the year and improve modestly from 2025, and cash flow before financing to improve in 2027; it expects to invest up to $32 million during the remainder of 2026 and up to $56 million in 2027, including a $20 million annual budget for minerals royalty growth investments, $16 million of Sawtooth capital expenditures in 2027, and the remaining $20 million budgeted for ongoing operations and other business development opportunities.