Peabody Energy Corporation
), world's largest private-sector coal company, is scheduled to
report its third-quarter 2012 financial results on October 22,
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Peabody reported second-quarter 2012 earnings of 73 cents per
share, beating the Zacks Consensus Estimate of 53 cents. However,
the company's quarterly earnings were lower than last year's
earnings of $1.16 per share. The year-over-year decline was due
to higher interest expenses and depreciation, depletion and
amortization expenses related to the acquisition of Macarthur
Coal in Australia.
The company's second-quarter 2012 revenue was $1,998.2 million
versus $1,980.5 million in the prior-year quarter, reflecting a
year-over-year growth of 0.9%. Quarterly revenue fell short of
the Zacks Consensus Estimate of $2,067 million.
Third-Quarter & Full-year 2012 Guidance
Peabody expects third-quarter 2012 adjusted earnings per share to
be in the band of 20 cents to 45 cents, and earnings before
interest, tax, depreciation and amortization ("EBITDA") to be in
the range of $350 million to $450 million.
For full-year 2012, the company is targeting total sales of 230 -
250 million tons, including 31 - 34 million tons from Australia,
185 - 195 million tons from the U.S. and the remainder from
Trading and Brokerage activities.
The Zacks Consensus Estimate for third-quarter 2012 earnings is
34 cents per share, lower than 87 cents per share reported in the
prior-year quarter. Currently, the Zacks Consensus Estimate for
the company's earnings ranges between 20 cents and 40 cents per
For full-year 2012, the Zacks Consensus Estimate stands at $1.77
per share, lower than the prior-year earnings of $4.17 per share.
The current Zacks Consensus Estimate for full-year 2012 ranges
from $1.48 to $2.13 per share.
Estimate Revisions Trend
For third-quarter 2012, we have observed that, in the last 7
days, 2 estimates have moved upward, while 1 estimate went in the
downward direction. Over the last 30 days, 1 estimate has moved
upwards whereas 5 estimates moved in the downward direction.
For full-year 2012, none of the estimates have moved upwards
whereas 3 estimates have moved downwards in the last 7 days. In
the last 30 days, none of the estimates have moved upwards
whereas 9 estimates followed a downward trend.
In the last 7 days, the Zacks Consensus Estimate for
third-quarter 2012 earnings remained unchanged.
In the last 30 days, the Zacks Consensus Estimate for
third-quarter 2012 earnings per share declined by a penny to 34
cents from 35 cents.
In the last 7 days, the Zacks Consensus Estimate for full-year
2012 earnings per share dropped by 4 cents to $1.77 from earlier
projection of $1.81.
In the last 30 days, the Zacks Consensus Estimate for full-year
2012 earnings per share plummeted 15 cents to $1.77 from earlier
projection of $1.92.
With respect to the earnings surprises, Peabody Energy
Corporation has topped the Zacks Consensus Estimate in three
quarters out of the last four quarters. Over the last four
quarters, the surprise ranges from -2.25% to 37.74% with an
average of 14.75%.
We believe that slow recovery of the U.S. economy and the lower
gas prices are challenging the coal demand in the domestic
market. In the international space, coal demand was negatively
impacted due to reduction in electricity generation and planned
production slow down in the manufacturing sector. These factors
primarily influenced Peabody to cut its 2012 capital expenditure
budget by $200 million to $1.0 billion.
Peabody Energy Corporation currently has short-term Zacks #5 Rank
(Strong Sell rating).
St. Louis, Missouri-based Peabody Energy Corporation is the
world's largest private- sector coal mining company and a global
leader in clean coal solutions. The company owns majority
interests in 29 mines in the U.S. and Australia. With a market
capitalization of $7.36 billion, Peabody has 8,300 full time
employees. The company's closest peer is
CONSOL Energy Inc.