) will release its fourth quarter 2012 financial results before
the market bell on Jan 29, 2013. In the prior quarter, this coal
operator reported a 50.00% earnings surprise. Peabody currently
has a Zacks Rank #5 (Strong Sell). Let's see how things are
shaping up at Peabody prior to this announcement.
PEABODY ENERGY (BTU): Free Stock Analysis
CONSOL ENERGY (CNX): Free Stock Analysis
OTTER TAIL CORP (OTTR): Free Stock Analysis
WISC ENERGY CP (WEC): Free Stock Analysis
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Factors to Consider This Quarter
2012 was overall a dull year for the coal industry as coal
companies continued to face the burnt of a mild winter, rising
competition from natural gas producers, increasing usage of
alternate energy for electricity generation and compliance with
increasing government regulation making their operations
Peabody's underground Willow Lake Mine in Southern Illinois met
with an accident in Nov 12, and the company decided to
permanently idle the mine as it failed to comply with acceptable
security standards. This closure will result in a charge of 10
cents to 15 cents (after tax) in the fourth quarter.
The company tried to sharpen its competitive edge and strengthen
its global operation by making changes to the top management in
both American and Australian business units.
Accordingly, our proven model does not conclusively show that
Peabody Energy is likely to beat earnings this quarter. That is
because a stock needs to have both a positive earnings Expected
Surprise Prediction (ESP) (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank of #1, 2 or 3 for this to happen. This is not
the case here.
Positive Zacks ESP:
This is because the Most Accurate estimate stands at 28
cents while the Zacks Consensus Estimate is lower at 26 cents,
resulting in +7.69% ESP.
Zacks Rank #5 (Strong Sell):
Peabody's Zacks Rank #5 complicates the forecasting power of ESP
making surprise prediction difficult. Even though Peabody
registered earnings surprise in the last four quarters, we
caution investors against the stock going into the earnings
announcement, especially with the company observing negative
estimate revisions momentum.
Other Stocks to Consider
Here are some other companies which are linked with the coal
industry you may want to consider on the basis of our model which
shows that they have the right combination of elements to post an
earnings beat this quarter:
CONSOL Energy Inc.
) has earnings ESP of +18.18% and carries a Zacks Rank #3 (Hold).
Otter Tail Corporation
) has earnings ESP of +6.67% and carries a Zacks Rank #3 (Hold).
Wisconsin Energy Corp.
) has earnings ESP of +2.38% and carries a Zacks Rank #1 (Strong