Peabody Energy Corp, the world's largest private sector coal miner, reported a smaller-than-expected first-quarter loss on Thursday as it pushed to cut costs in a tough market, but revenue fell just short of analysts' expectations. Margins dropped sharply in its Australian coal business. The company had hoped that strength in that business would offset weakness in the United States.
Peabody boosted its presence in Australia, and thus its access to key Asian markets, in late 2011, acquiring Macarthur Coal for nearly $5 billion. Weak prices for both metallurgical coal, used to make steel, and thermal coal, typically used to produce electricity, have battered US coal producers in recent quarters. "While recent market dynamics have not yet translated into expected seaborne price increases, we see another year of import growth from China and India, growing Chinese steel production, and new coal generation being built around the globe," Chief Executive Gregory Boyce said in a statement.
The company said lower prices for Australian coal and a slide in US shipments hit revenue, which dropped 14 percent to $1.75 billion. Analysts, on average, had been expecting $1.78 billion, according to Thomson Reuters I/B/E/S. For the current quarter, Peabody forecast results between an adjusted loss of 25 cents a share and an adjusted profit of 1 cent a share. It expects Australian volumes to rise. Peabody maintained its full-year sales targets and said it now expects its costs per short ton in the United States to fall by 2 and 3 percent from 2012.
The first-quarter net loss attributable to common shareholders was $23.4 million, or 9 cents a share, compared with earnings of $172.7 million, or 63 cents, a year earlier. The adjusted loss from continuing operations was 5 cents a share, compared with analysts' average forecast of a loss of 14 cents.
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