Peabody Energy Q3 Results Top Estimates, Guides 2014 Loss In Line

(RTTNews) - Coal miner Peabody Energy Corp. (BTU) reported Monday a loss for the third quarter that sharply widened from last year, hurt primarily by the impact of a non-cash tax expense related to the repeal of the Minerals Resource Rent Tax in Australia as well as reduced realized pricing.

However, adjusted loss per share from continuing operations came in narrower that analysts' expectations, and quarterly revenues topped their estimates. The company also projected a significant loss for the full-year 2014, in line with Street view.

"In the face of challenging times for the coal industry, Peabody continues to control the controllable and take the necessary actions to best position the company through strong operating performance, solid operating cash flows, lower costs and reduced capital targets," Chairman and CEO Gregory Boyce said in a statement.

The St. Louis, Missouri-based world's largest private-sector coal producer reported a net loss of $150.6 million or $0.56 per share for the third quarter, sharply wider than $26.1million or $0.10 per share in the prior-year quarter.

Loss from continuing operations was $154.0 million or $0.58 per share, compared to income of $24.0 million or $0.06 per share in the year-ago quarter.

Excluding items, adjusted income from continuing operations was $0.59 per share, compared to last year's $0.05 per share.

On average, nine analysts polled by Thomson Reuters expected the company to report a loss of $0.66 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter declined to $1.72 billion from $1.80 billion in the same quarter last year, but topped eleven Wall Street analysts' consensus estimate of $1.64 billion.

The revenue decline was attributable to lower realized pricing from mining operations in Australia.

Peabody's sales volumes for the third quarter declined to 62.5 million tons from 69.1 million tons a year ago.

U.S. mining operation revenues declined to $1.02 billion from $1.05 billion in the prior-year quarter on lower volumes and reduced Midwestern revenues per ton.

Australian mining operation revenues declined 4 percent to $676.3 million from the year-ago quarter as higher volumes partly offset a 13 percent reduction in revenues per ton.

Income Tax Provision for the quarter was $79.4 million, compared to a tax benefit of $18.6 million last year.

Looking ahead to fiscal 2014, the company expects adjusted loss in a range of $1.48 to $1.38 per share. Street is currently looking for full-year 2014 loss of $1.46 per share.

Peabody is also now projecting total annual sales in a range of 245 million tons to 255 million tons, including U.S. sales of 185 million tons to 190 million tons and Australian sales of 36 million tons to 38 million tons.

Previously, The company anticipated annual sales in a range of 245 million to 265 million tons, including U.S. sales of 185 million tons to 195 million tons and Australian sales of 35 million tons to 37 million tons.

Based on strong capital efficiency to date, Peabody is again reducing 2014 capital spending targets to $200 from $220 million, which is well below 2013 levels with spending primarily focused on sustaining capital.

"Regarding industry fundamentals, we look forward to greater realization of announced metallurgical coal supply cutbacks, continued growth in Indian coal imports, and improving Southern Powder River Basin rail performance to rebuild utility stockpiles and meet strong underlying demand," Boyce added.

On the global coal markets, the company said the markets continue to reflect oversupply and concerns over Chinese coal imports. But, it added that it is seeing some favorable industry indicators as India is transitioning to become the fastest-growing coal importer.

In Monday's regular trading session, BTU is currently trading at $11.17, up $0.14 or 1.27% on a volume of 1.18 million shares.