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Peabody posts surprise gain, coal shipments up
New York • Peabody Energy Corp. reported a surprise increase Tuesday in revenue for the second quarter on higher sales volumes from mines in Australia and the western United States.
Sales rose 1.9 percent to $1.76 billion, the St. Louis-based company said in a statement, exceeding the $1.63 billion average of 12 analysts' estimates compiled by Bloomberg. The country's largest coal-mining company, Peabody's loss excluding one-time items was 28 cents a share, compared with the 29-cent average estimate. The shares gained the most in two months.
The volume of metallurgical coal shipped from Australia rose 17 percent in the period. Volumes from the western U.S., where Peabody extracts coal that's sold to power utilities, gained 6.6 percent.
Chairman and Chief Executive Officer Greg Boyce said on a conference call with analysts that 1.3 million tons of metallurgical coal sales were carried over from the first quarter. The quarterly price benchmark for the steelmaking ingredient was higher in the first quarter, at $143 a metric ton. The price was agreed at $120 a ton for the second and third quarters.
Peabody rose 1.4 percent to $15.53 today at 11:48 a.m. in New York. Earlier it climbed 3.7 percent, the most intraday since May 12.
Despite Tuesday's positive surprise on revenue, Peabody is still among U.S. coal producers that have fallen into unprofitability because of the headwinds facing the industry. Its second-quarter net loss was $73.3 million, or 27 cents a share, compared with net income of $90.3 million, or 33 cents, a year earlier.
Metallurgical coal prices are at a six-year low amid a supply glut. At the same time, low-cost natural gas has taken market share from electricity-producing thermal coal.
Peabody said Tuesday its third-quarter loss per share excluding one-time items will be 40 cents to 53 cents. That's wider than the 19-cent loss average of 20 analysts' estimates compiled by Bloomberg.
The company said lower coal prices and the move of three longwalls - large underground mining machines - will weigh on its performance in the current quarter.