Tue Jul 19, 2011
* Q2 adj profit $1.11/shr vs $1.05/shr Wall St estimate
* Revenue rises 21 percent to $2.01 bln
* Stock up 0.4 percent
By Steve James
NEW YORK, July 19 (Reuters) - Coal miner Peabody Energy Corp (BTU.N: Quote) beat Wall Street estimates with a big jump in second-quarter profit due to higher export prices and said it expected the second half of the year to be even better.
The company raised its full-year 2011 earnings goal and said third-quarter results should benefit from higher volumes and strong prices for coal it exports from Australia.
In morning New York Stock Exchange trading, Peabody stock was up 0.4 percent at $60.12.
"U.S. and Australian operations were in line with our expectations," Brean Murray Carret & Co analyst Jeremy Sussman wrote in a research note. "The bottom line is that with another solid quarter, and a sizable guidance raise, we'd expect Peabody to be fairly strong."
Chief Executive Officer Gregory Boyce said Peabody anticipated an even stronger second half and wanted to expand its Australian operations to tap into strong Asian markets, particularly in China and India.
"Pacific Rim growth continues to lead coal through the early stages of a demand supercycle, bolstering Australian metallurgical and thermal coal demand and pricing," he said.
"Seaborne demand is further strengthened by rising needs in the Atlantic market where coal is required to backfill for declining nuclear use in Europe," he added.
Germany and some other countries are abandoning nuclear power following this year's scare after an earthquake and tsunami in Japan.
Boyce said electricity generation had risen 14 percent so far this year in China and 8 percent in India, driving increases in thermal coal use. World steel output has increased 8 percent year to date, which would equate to an additional 70 million to 80 million tonnes of additional metallurgical coal demand throughout 2011, he said.
Last week, Peabody and steelmaker ArcelorMittal (ISPA.AS: Quote) made a joint $5 billion offer for Australia's Macarthur Coal (MCC.AX: Quote) to acquire more metallurgical reserves.
Peabody said on Tuesday that second-quarter earnings from continuing operations rose to $293 million or $1.05 per share, from $214.7 million or 76 cents per share, a year earlier.
Adjusted for the impact of outstanding litigation, earnings were $1.11 per share. On that basis, they beat analysts' estimates of $1.05, according to Thomson Reuters I/B/E/S.
Revenue rose 21 percent to $2.01 billion as demand from Asia drove up metallurgical, or coking, coal prices, said Peabody, whose mines are in the United States and Australia. The higher prices offset a dip in sales volume to 58.2 million tons from 59.7 million tons.
Earnings before interest, taxes, depreciation and amortization rose 32 percent to $579.5 million, mostly due to greater contributions from Australian mining operations.
"Revenues per ton in Australia rose significantly over prior-year levels, overcoming increased operating costs due to residual weather impacts, higher royalties and currency appreciation," the company said.
In the United States, geologic problems at one mine depressed results by about $34 million. Inclement weather and flooding also affected production volumes in the Midwest and volumes shipped from the Powder River Basin in Wyoming due to rail transportation constraints.
Peabody said it expected third-quarter earnings per share of $1.05 to $1.25, excluding items, and EBITDA of $575 million to $675 million. For the full year, it raised its targets for adjusted earnings per share target to between $4.20 and $4.60 and EBITDA to a range of $2.3 billion to $2.5 billion.
* Q2 adj profit $1.11/shr vs $1.05/shr Wall St estimate
* Revenue rises 21 percent to $2.01 bln
* Stock up 0.4 percent
By Steve James
NEW YORK, July 19 (Reuters) - Coal miner Peabody Energy Corp (BTU.N: Quote) beat Wall Street estimates with a big jump in second-quarter profit due to higher export prices and said it expected the second half of the year to be even better.
The company raised its full-year 2011 earnings goal and said third-quarter results should benefit from higher volumes and strong prices for coal it exports from Australia.
In morning New York Stock Exchange trading, Peabody stock was up 0.4 percent at $60.12.
"U.S. and Australian operations were in line with our expectations," Brean Murray Carret & Co analyst Jeremy Sussman wrote in a research note. "The bottom line is that with another solid quarter, and a sizable guidance raise, we'd expect Peabody to be fairly strong."
Chief Executive Officer Gregory Boyce said Peabody anticipated an even stronger second half and wanted to expand its Australian operations to tap into strong Asian markets, particularly in China and India.
"Pacific Rim growth continues to lead coal through the early stages of a demand supercycle, bolstering Australian metallurgical and thermal coal demand and pricing," he said.
"Seaborne demand is further strengthened by rising needs in the Atlantic market where coal is required to backfill for declining nuclear use in Europe," he added.
Germany and some other countries are abandoning nuclear power following this year's scare after an earthquake and tsunami in Japan.
Boyce said electricity generation had risen 14 percent so far this year in China and 8 percent in India, driving increases in thermal coal use. World steel output has increased 8 percent year to date, which would equate to an additional 70 million to 80 million tonnes of additional metallurgical coal demand throughout 2011, he said.
Last week, Peabody and steelmaker ArcelorMittal (ISPA.AS: Quote) made a joint $5 billion offer for Australia's Macarthur Coal (MCC.AX: Quote) to acquire more metallurgical reserves.
Peabody said on Tuesday that second-quarter earnings from continuing operations rose to $293 million or $1.05 per share, from $214.7 million or 76 cents per share, a year earlier.
Adjusted for the impact of outstanding litigation, earnings were $1.11 per share. On that basis, they beat analysts' estimates of $1.05, according to Thomson Reuters I/B/E/S.
Revenue rose 21 percent to $2.01 billion as demand from Asia drove up metallurgical, or coking, coal prices, said Peabody, whose mines are in the United States and Australia. The higher prices offset a dip in sales volume to 58.2 million tons from 59.7 million tons.
Earnings before interest, taxes, depreciation and amortization rose 32 percent to $579.5 million, mostly due to greater contributions from Australian mining operations.
"Revenues per ton in Australia rose significantly over prior-year levels, overcoming increased operating costs due to residual weather impacts, higher royalties and currency appreciation," the company said.
In the United States, geologic problems at one mine depressed results by about $34 million. Inclement weather and flooding also affected production volumes in the Midwest and volumes shipped from the Powder River Basin in Wyoming due to rail transportation constraints.
Peabody said it expected third-quarter earnings per share of $1.05 to $1.25, excluding items, and EBITDA of $575 million to $675 million. For the full year, it raised its targets for adjusted earnings per share target to between $4.20 and $4.60 and EBITDA to a range of $2.3 billion to $2.5 billion.
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