Nacco's Contract Mining Profit More Than Doubles

The Tip Desk · November 4, 2026 · 4 min read

Adjusted EBITDA reached $20.4 million in the third quarter as Contract Mining operating profit more than doubled on a new Florida dragline contract.

NACCO Industries (NC) reported third-quarter 2026 revenue of $80.5 million, up 5% from a year earlier, as Contract Mining and Utility Coal Mining lifted operating profit to $9.3 million.

The diversified natural resources company swung from a $2.3 million operating loss in the second quarter, when it recorded $12.0 million of solar asset impairment charges, to the $9.3 million profit, which included $3.4 million of solar curtailment costs. Operating profit rose 37% from $6.8 million in the year-ago quarter.

Consolidated Adjusted EBITDA was $20.4 million, up 63% from $12.5 million a year earlier.

Net income was $10.9 million, or $1.44 a share, down from $13.3 million, or $1.78 a share, because income tax expense rose to $1.6 million from a $7.3 million tax benefit a year earlier. Income before taxes was $12.5 million, including a $4.5 million gain on the settlement of an excess pension funding liability.

Contract Mining was the quarter’s clearest operating inflection. Revenues excluding reimbursable costs rose 75% to $22.2 million as the new multi-year dragline services contract in Palm Beach County, Florida, ramped, more than offsetting lower limestone volumes. Operating profit was $4.9 million, and Segment Adjusted EBITDA was $7.6 million.

Utility Coal Mining operating profit was $6.6 million, with Segment Adjusted EBITDA of $8.9 million, which the company attributed to improved contractual pricing and lower inventory impairment charges at Mississippi Lignite Mining Company. Total coal deliveries were 6.2 million tons.

Minerals and Royalties revenue fell to $6.1 million on lower natural gas production and pricing, partly offset by higher oil production and pricing. Operating profit was $7.7 million, with higher equity earnings largely offsetting the royalty decline.

Unallocated results, which include Mitigation Resources, solar development and public-company costs, posted an operating loss of $9.9 million, including the $3.4 million of solar curtailment costs. Excluding those costs, the company said the Unallocated operating loss and Segment Adjusted EBITDA improved year over year.

President and Chief Executive Officer J.C. Butler said third-quarter results reflected continued progress in strengthening the performance of the businesses, with strong improvements in operating profitability and Adjusted EBITDA even as the company incurred costs associated with the curtailment of certain solar development activities.

The company said changing market conditions, regulatory developments and project-specific challenges led it in the second quarter to reassess certain solar investments. It recognized $3.4 million of curtailment costs in the third quarter and said it expects to incur certain additional costs in the fourth quarter of 2026 and may incur further costs in future years, with amounts and timing dependent on discussions with counterparties and efforts to transfer ownership or otherwise monetize the projects. Full-year 2026 consolidated operating profit is expected to be comparable to the prior year, including approximately $15 million of solar-related impairment and curtailment costs recognized through the third quarter.

Contract Mining is expected to show substantial year-over-year growth in operating profit and Segment Adjusted EBITDA in both the fourth quarter and full-year 2026, with continued operating-profit growth in 2027 that includes a full year of the Palm Beach and Arizona quarry contracts. Minerals and Royalties fourth-quarter and full-year 2026 operating profit and Segment Adjusted EBITDA are expected to decline from the respective prior-year periods on lower royalty income, partially offset by higher expected income from Eiger Resources.

Utility Coal Mining full-year 2026 operating profit is expected to increase over 2025. Fourth-quarter operating results are expected to be lower than the prior-year quarter due to reduced customer demand, higher diesel fuel costs at Mississippi Lignite, and Sabine Mining Company’s owner assuming reclamation activities effective October 1, 2026.

At September 30, 2026, outstanding debt was $124.8 million and total liquidity was $115.2 million, consisting of $56.5 million of cash and $58.7 million of availability under the revolving credit facility. The company anticipates investing up to $32 million during the remainder of 2026 and up to $56 million in 2027.