Peabody Energy Corporation
) reported fourth-quarter 2012 pro forma loss of $1.12 per share,
below the Zacks Consensus Estimate of pro forma earnings of 26
cents per share and the year-ago earnings per share of 98 cents.
The disappointing results were primarily due to lower top line
coupled with increase in operating expenses.
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Peabody's GAAP loss during the fourth quarter of 2012 was $3.73
per share versus earnings of 92 cents per share reported in the
year-ago quarter. The difference between GAAP and pro forma loss
was due to an impact of $2.61 associated with asset impairment
and closure of certain mines.
Peabody's pro forma earnings for full-year 2012 were 84 cents per
share, missing the Zacks Consensus Estimate of $1.98 per share.
Annual earnings per share were below the 2011 level of $3.77 per
Peabody's GAAP loss of 2012 was $1.80 per share versus earnings
of $3.77 per share reported in the year-ago quarter. The variance
between GAAP loss and pro forma earnings was due to an impact of
$2.61 associated with asset impairment and closure of certain
mines and 3 cents charge related to foreign income tax accounts.
Peabody's quarterly revenue of $2.02 billion decreased 9.5% year
over year due to a decline in both the U.S. and Australian mining
revenue as well as a substantial reduction in revenue from
trading and brokerage operations. However, the company's revenue
for the quarter surpassed the Zacks Consensus Estimate of $1.92
For full-year 2012, Peabody recorded revenue of $8.08 billion, up
2.3% year over year, primarily due to higher Australian volumes
and improved realized pricing in the U.S. A 14% rise in
Australian revenue also bolstered the annual top line.
Improvement in Australian results was driven by an increase of
30% in shipments, and higher volumes from Wilpinjong and
Millennium mines. The company's full-year 2012 revenue beat the
Zacks Consensus Estimate of $8.02 billion.
Peabody's total sales volume in the quarter was 63.3 million
tons, down 7% from the prior-year level. Quarterly sales volume
declined due to 9.2% and 12.1% year-over-year dip in Midwestern
and Western U.S. mining output, respectively. This was partially
offset by 36.6% rise in Australian volumes.
Sales volume in 2012 reached 248.5 million tons, slightly missing
last year's sales of 249.4 million tons.
In addition, the company's annual top line gained from increased
Australian volumes and higher realized pricing in the U.S.
Revenue per ton, in the U.S., in 2012 increased 6.5% year over
year to $22.61, while revenue per ton in Australia decreased 13%
Peabody's full-year 2012 earnings before interest, tax,
depreciation and amortization ("EBITDA") were $1.84 billion,
declining 13.2% from $2.12 billion in 2011. Operating profit in
2012 was $172.5 million compared with $1,595.7 million a year
ago. The decline in operating profit was primarily due to certain
assets impairment and mine closure costs.
As of Dec 31, 2012, Peabody had $558.8 million in cash and $548.4
million in inventories versus $799.1 million in cash and $444.4
million in inventories as of Dec 31, 2011.
Long-term debt of the company as of Dec 31, 2012, was $6.20
billion versus $6.56 billion as of Dec 31, 2011.
Peabody's capital expenditure in the fourth quarter of 2012 was
$255.2 million, bringing full year spending to $996.7 million.
Peabody expects first-quarter 2013 adjusted EBITDA to come in the
range of $200 million to $270 million and adjusted loss per share
in the band of 26 cents to 4 cents. However, the company
cautioned that the first quarter 2013 results will be impacted by
the timing of shipments in Australia, lower realized
metallurgical coal pricing, and lesser U.S. sales and pricing.
For full-year 2013, the company is targeting total sales of 230 -
250 million tons, including 180 to 190 million tons from the
U.S., 33 to 36 million tons from Australia and the remainder from
Trading and Brokerage activities.
The company guides its full-year 2013 capital spending to $450 -
$550 million, which is half of the 2012 level.
The company failed to beat both quarterly as well as annual
earnings projections due to lower sales volume and decline in
revenues per ton. However, the company's annual revenue improved
primarily due to an increase in Australian volumes.
Overall, the year 2012 was dull for the coal industry as the coal
companies continues to face challenges from increasing usage of
alternate energy for electricity generation, rising competition
from natural gas producers, production-slash in manufacturing
sector, mild winter and compliance with rising government
regulations, which increased their operating costs.
Despite increased demand for metallurgical and thermal coal from
China, Japan, India and some European countries, we expect the
above mentioned reasons might weigh on the demand in the next
couple of years.
Peabody Energy currently has a short-term Zacks Rank #5 (Strong
St. Louis, Missouri-based Peabody Energy Corporation is a private
sector coal mining company. The company has interests in 28 coal
operations located in the U.S. and Australia, and has joint
venture interests in a Venezuelan mine. Other players from the
Natural Resource Partners LP
Wisconsin Energy Corporation
Clean Energy Fuels Corp.
) are yet to announce their quarterly results.