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Peabody Energy (BTU) Posts Narrower-Than-Expected Loss in Q4

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Zacks Equity Research
·3 min read
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Peabody Energy BTU incurred fourth-quarter 2019 loss of 55 cents per share, which is narrower than the Zacks Consensus Estimate of a loss of 97 cents. However, the company reported earnings of 88 cents per share in the year-ago quarter.

Revenues

Quarterly revenues of $1,117 million surpassed the Zacks Consensus Estimate of $1,023 million by 9.2%. However, the top line declined 20% from the year-ago quarter.

Peabody Energy Corporation Price, Consensus and EPS Surprise
 

Peabody Energy Corporation Price, Consensus and EPS Surprise
Peabody Energy Corporation Price, Consensus and EPS Surprise

Peabody Energy Corporation price-consensus-eps-surprise-chart | Peabody Energy Corporation Quote

Highlights of the Release

Peabody Energy’s total sales volume was 40.8 million tons, down 11.7% from 46.2 million tons registered in the year-ago quarter. Sales volume during the quarter was impacted by a 12.9% year-over-year decline in U.S. thermal mining operations.

Operating costs and expenses declined 19.2% to $825.1 million from $1,021.5 million in the prior-year quarter.

In the reported quarter, revenues per U.S. thermal ton improved 10.9% year over year to $20. Seaborne metallurgical cost dropped 20.7% year over year to $104.62 per ton.

The company has undertaken the approach of "live within our means" for 2020. In this regard, it has sharply reduced capital expenditures, modified the assets portfolio and taken initiatives to improve operations. The company has already entered into a joint venture with Arch Coal ARCH to develop its high-quality assets. The companies will no longer compete with each other for orders but work jointly and share profits.

Financial Update

As of Dec 31, 2019, cash and cash equivalents amounted to $732.2 million compared with $981.9 million in the corresponding period of 2018.

Long-term debt of the company was $1,292.5 million as of Dec 31, 2019, down from $1,330.5 million in the comparable period of 2018.

During the quarter, cash flow from operating activities amounted to $124.8 million compared with $228.9 million in the year-ago period.

Guidance

For 2020, Peabody Energy has a strong U.S. contracted position with 96 and 20 million tons in the Powder River Basin and other U.S. thermal mines, respectively. The company’s flexibility to increase volumes should boost demand. It anticipates to export 8.3 million short tons of metallurgical coal.

The company projects 2020 capital expenditure of $250 million, indicating 12% fall from 2019. Capital spending for 2020 includes life extension project capital at the Wilpinjong and Wambo open-cut mines.

Zacks Rank

Currently, Peabody Energy carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Releases

Alliance Resource Partners ARLP reported fourth-quarter 2019 operating earnings of 20 cents per unit, in line with the Zacks Consensus Estimate.

SunCoke Energy Inc. SXC reported fourth-quarter 2019 loss of 2 cents per share against the Zacks Consensus Estimate of earnings of 3 cents.

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