NACCO Industries Q2 Earnings Call Highlights

NACCO Industries NYSE: NC reported stronger operating performance across its utility coal mining, contract mining and minerals and royalties businesses in the second quarter of 2026, but solar-project impairment charges drove the company to a consolidated operating loss and net loss for the period. Revenue rose 6% year over year to $72.3 million, while gross profit more than doubled to $15.2 million from $6.8 million. Consolidated Adjusted EBITDA increased 72% to $15.9 million, compared with $9.3 million a year earlier.

However, NACCO recorded $12 million in impairment charges tied to two solar development projects within its ReGen Resources business. The company posted an operating loss of $2.3 million, compared with an operating loss of less than $100,000 in the prior-year quarter. NACCO reported a net loss of $1 million, or $0.13 per diluted share, versus net income of $3.3 million, or $0.44 per diluted share, in the second quarter of 2025.

President and CEO J.C. Butler said the solar impairments followed a reassessment of project economics after the company received updated information on rising costs and delays in connecting generation facilities to the power grid. Butler cited tax-law changes associated with the One Big Beautiful Bill Act, demand for generating equipment and engineering, procurement and construction services, higher costs for grid-connection equipment, and tariff-related price increases. He said the developments created “a perfect storm” for renewable projects that had been initiated before the law’s enactment.

“We are not treating this as business as usual,” Butler said, adding that the company is evaluating alternatives to monetize the investments and limit additional capital needs. Those alternatives include potential asset sales, contract amendments and other strategic actions. He said further curtailment charges could occur depending on the outcomes. NACCO said the experience reinforced its intention to apply heightened scrutiny to investments outside its established operating platforms. The company expects second-half and full-year operating profit and net income to be lower than in 2025, reflecting the solar charges and the potential for additional curtailment or impairment charges.

Utility coal mining operating profit rose to $6.3 million from $1.2 million in the prior-year quarter, while segment Adjusted EBITDA increased to $8.7 million from $3.4 million. Results were driven primarily by improved performance at Mississippi Lignite Mining Company, or MLMC. MLMC faced lower production requirements after operational issues at its customer’s power plant. Butler said the mining operation shifted resources to plan...