- The Washington Times - Wednesday, April 15, 2009

ST. LOUIS (AP) - Coal miner Peabody Energy Corp. said Wednesday its first-quarter profit tripled, but the performance fell short of Wall Street’s expectations as the company deferred its earnings outlook for the year and again trimmed its production.

The St. Louis-based company, one of the world’s biggest coal producers, reported net income attributable to common shareholders of $170 million, or 63 cents per share, as higher, locked-in prices fetched on its contract sales offset slumping spot coal prices. A year ago, Peabody’s profit was $57 million, or 21 cents per share.

Analysts surveyed by Thomson Reuters expected, on average, earnings per share of 94 cents and revenue of $1.62 billion.

Revenue rose 15 percent to $1.46 billion.

The company’s shares slid 12.6 percent, or $3.71, to $26.63 in midday trading.

Peabody said it sold 59.6 million tons of coal during the quarter, down slightly from 60.9 million tons a year earlier, reflecting previously announced production cuts, weather impacts in Peabody’s Powder River Basin operations in Wyoming and deferred customer shipments in Australia.

Citing “continued uncertainty around the economy, steel demand and electricity generation,” Peabody said it was paring its 2009 production estimates to 185 million to 190 million tons in the United States and 20 million to 23 million tons in Australia, with total sales of 225 million to 245 million tons. The company earlier had expected output of 190 million to 195 million tons in the U.S. and 22 million to 24 million tons in Australia.

Peabody also said it would hold off on offering its full-year financial outlook, saying such results will be affected by issues including the length of the global economic slump, Australian seaborne coal pricing, volumes and the potential for more customer shipment delays.

As noted by analysts, Peabody said global demand for coal remained sluggish over this year’s first three months, partly because steel production worldwide slumped 23 percent from a year ago and electricity demand slipped.

Daniel Scott, an analyst with Dahlman Rose & Co., called Peabody’s first-quarter showing “a discouraging start to earnings season” among coal companies.

“The wide earnings miss combined with negative sentiment in today’s release are not encouraging, in our view,” Scott wrote in a note to investors. “Significant unpriced volume in Australia and lack of financial guidance are also potential overhangs on the stock.”

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On the Net:

Peabody Energy Corp., https://peabodyenergy.com


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