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Peabody Energy (BTU) Q2 Earnings Top Estimates, Revenues Miss

Zacks Equity Research

Peabody Energy Corp. BTU reported second-quarter 2019 earnings of 37 cents per share, which surpassed the Zacks Consensus Estimate of 28 cents by 32.1%. However, the bottom line decreased 60.2% year over year.

Despite its Shoal Creek Mine’s solid performance, the company’s second-quarter earnings were adversely impacted by a drop in coal sales volume and a year-over-year reduction in the price of per ton of coal sold.

Revenues

Quarterly revenues of $1,149 million lagged the Zacks Consensus Estimate of $1,231 million by 6.7%. The top line also declined 12.3% from $1,309.4 million recorded in 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-eps-surprise-chart | Peabody Energy Corporation Quote


Quarterly Highlights

Peabody’s total sales volume was 39.4 million tons, down from 43.1 million tons registered in the year-ago quarter. Sales volume during the quarter was impacted by a 6.4% year-over-year decline in Total U.S. Thermal Mining Operations.

Operating costs and expenses incurred in the reported quarter decreased 9.3% to $858.2 million from $946.5 million in the prior-year period.

Revenues per ton decreased 3.6% year over year to $18.43, while cost per ton declined 3.5% to $15.33.

During the quarter under review, Peabody entered into a definitive agreement with Arch Coal to form a highly synergistic joint venture. This collaboration is aimed at strengthening the competitiveness of coal against natural gas and renewables while creating substantial value for customers and shareholders.

Financial Update

As of Jun 30, 2019, cash and cash equivalents amounted to $853 million compared with $981.9 million on Dec 31, 2018.

Long-term debt of the company was $1,327.1 million as of Jun 30, 2019, down from 1,330.5 million on Dec 31, 2018.

Cash flow from operating activities summed $179.4 million compared with $335.7 million in the year-ago period.

Peabody repurchased $57.2 million stock in the second quarter and subsequently bought back an additional $51 million shares in July 2019. The company still have $283 million in its $1.5 billion share repurchase authorization.

Guidance

For 2019, Peabody expects sales volume from the Power River Basin to be within 105-115 million short tons. It also anticipates exporting metallurgical coal in the range of 9.4-10.4 million short tons.

Nonetheless, the company reiterated its 2019 capital expenditure guidance in the band of $350-$375 million.
 
Zacks Rank

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

Coal Releases

Arch Coal Inc. ARCH delivered second-quarter 2019 operating earnings of $3.53 per share, which beat the Zacks Consensus Estimate of $3.31 by 6.65%.
 
Alliance Resource Partners, L.P. ARLP reported second-quarter 2019 operating earnings of 44 per unit, missing the Zacks Consensus Estimate of 65 cents by 32.3%.

SunCoke Energy Inc. SXC delivered second-quarter 2019 operating earnings of 3 cents per share, which lagged the Zacks Consensus Estimate of 20 cents by 85%.
 
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