Bloomberg News

Peabody Drops as Profit Misses Estimates on Australia Output

January 24, 2012

(Updates with closing share price in second paragraph.)

Jan. 24 (Bloomberg) -- Peabody Energy Corp., the biggest U.S. coal producer, fell after posting fourth-quarter profit that missed analysts’ estimates because of lower output at its Australian operations .

Peabody dropped 1.7 percent to $36.86 in New York after earlier sliding as much as 7.5 percent, the biggest intraday decline since Nov. 17. Net income rose 5.9 percent to $222.4 million, or 82 cents, from $210 million, or 77 cents, a year earlier, the St. Louis-based company said today in a statement. Earnings excluding a tax-related expense were 98 cents, lagging behind the $1.30 average of 23 estimates compiled by Bloomberg.

Sales from Australian mines fell to 6.2 million tons from 6.7 million tons. “Geological issues” reduced output at North Goonyella in Australia, Peabody said. The company is also moving a longwall, a type of coal face at an underground mine, at the Twentymile pit in Colorado, which will interrupt production there.

“This is a weak start to the coal earnings season,” Lucas Pipes, an analyst at Brean Murray Carrett & Co. in New York, said in a note. “The quarter’s North Goonyella recovery/longwall move was a greater-than-expected impact.”

Earnings before interest, taxes, depreciation and amortization at Peabody’s Australian assets were $338.1 million, compared with the $379.9 million estimated by Pipes.

Peabody forecast first-quarter earnings that also missed analysts’ estimates. Ebitda will be $500 million to $600 million, it said, compared with the $710 million average of four analysts’ estimates.

U.S. coal consumption will continue to be affected by “muted economic growth and additional coal-to-gas switching,” Peabody said. Electricity generation from coal dropped by an estimated 5 percent in 2011, the company said.

Fourth-quarter sales climbed 26 percent to $2.25 billion from $1.79 billion.

--Editors: Simon Casey, Will Wade

To contact the reporter on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net

To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net


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