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Peabody's (BTU) Q1 Earnings Top Estimates, Revenues Down Y/Y

Zacks Equity Research

Peabody Energy Corp. BTU announced first-quarter 2019 earnings of $1.15 per share, which surpassed the Zacks Consensus Estimate of 50 cents by a whopping 130%. Further, the bottom line was up 38.6% year over year.

The strong first-quarter earnings were attributable to its new Shoal Creek Mine, significant margins in the seaborne thermal business and recognition of maximum North Goonyella insurance recoveries.

Quarterly revenues of $1,250.6 million fell 14.5% from $1,462.7 million in the year-ago quarter, reflecting adverse impact of the coal industry logistics chain.

The reported revenues also lagged the Zacks Consensus Estimate of $1,255 million by 0.4%.

Peabody Energy Corporation Price, Consensus and EPS Surprise

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

Operational Update

The company’s total sales volume was 40.5 million tons, down from 48.3 million tons registered in the year-ago quarter. Sales volume during the quarter was impacted by a 22% year-over-year decline in Power River Basin coal shipments, as winter weather and flooding across the plains states heavily impacted rail performance beginning in early February.

Operating costs and expenses incurred in the reported quarter decreased 10.3% to $948.4 million from $1,057.2 million in the prior-year period.

Revenues per ton in the United States were up 3.9% year over year to $18.71 and cost per ton increased 4.8% to $15.33.

Financial Update

As of Mar 31, 2019, cash and cash equivalents amounted to $798.1 million compared with $981.9 million on Dec 31, 2018.

Long-term debt of the company was $1,326.9 million as of Mar 31, 2019, down from 1,330.5 million on Dec 31, 2018.

Cash flow from operating activities in the reported quarter was $197.6 million compared with $579.7 million in the year-ago period.

Peabody repurchased $98.8 million stock in the first quarter and subsequently bought back an additional $34 million shares in April 2019. Since August 2017, the company repurchased a total of 31.2 million shares.


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

The company lowered its 2019 capital expenditure guidance to the range of $350-$375 million from earlier expectation of $375-$425 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 reported first-quarter 2019 operating earnings of $3.36 per share, which beat the Zacks Consensus Estimate of $2.53 by 32.8%.

Alliance Resource Partners, L.P. ARLP reported first-quarter 2019 operating earnings of $1.03 per unit, beating the Zacks Consensus Estimate of 69 cents by 49%.

Upcoming Coal Release

CONSOL Coal Resources LP CCR is expected to report first-quarter earnings on May 8. The Zacks Consensus Estimate for the partnership’s earnings is currently pegged at 45 cents per unit.

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