Atlas Energy Solutions Lowers Q3 Outlook Amid Higher Costs

Atlas Energy Solutions Inc. revises its Q3 outlook downwards due to increased operational expenses. Despite this, the company anticipates significant logistical advancements and a positive long-term impact from its Dune Express project and proppant sales.

Date: 10-10-2024

AI Rating: 5

Atlas Energy Solutions Inc. (AESI) has made adjustments to its third-quarter outlook, primarily due to higher plant operating expenses associated with its new Dune Express project. The company's revised expectations indicate an adjusted EBITDA ranging from $70 to $75 million and forecasted revenue between $300 million to $310 million. This revision follows initial projections that had suggested a meaningful improvement in financial results sequentially.

The report outlines the initiation of the commissioning of the 42-mile long fully electric conveyor system, Dune Express, which is designed to enhance proppant logistics in the Permian Basin. The anticipated commercial transportation of proppant into the Delaware Basin is set to commence late in the fourth quarter. Furthermore, the company estimates proppant sales volumes at approximately 6 million tons for the year.

Nonetheless, Atlas Energy is preparing to take a hit with a projected asset write-down of around $9 million related to one of its dredge mining assets. Despite this setback, the CEO expressed confidence in the company’s strategic investments, aiming to position Atlas as the low-cost supplier of premium proppant in the region by 2025 and beyond.

The analysis does not present specific information regarding Earnings Per Share (EPS), Net Income, Profit Margins (Gross, Operating, Net), Free Cash Flow (FCF), or Return on Equity (ROE). However, the adjustments to EBITDA and revenue indicate a shift in expectations that could influence investor sentiment.

Stocks: AESI