Shares of Peabody Energy Corp. (NYSE:BTU) are under pressure today even after the company handily beat earnings estimates of Wall Street, as guidance for the next couple of quarters were below expectations.
In the first quarter, income from continuing operations rose to $179.6 million, or 65 cents a share, up from $137.1 million, or 50 cents a share, in the same quarter last year.
Adjusted earnings climbed 29 percent to 67 cents a share, easily beating the Wall Street estimate of 60 cents. In early 2011 Peabody said it was targeting adjusted earnings of 45 cents to 65 cents a share.
Revenue was up 15 percent to $1.74 billion as coal prices rose after the devastating floods earlier in the year in Australia.
That was the major reason for the weaker guidance, as the company said the impact of the Australian floods will offset the higher volumes and coal prices going forward. Also noted was production at its Twentymile Mine in Colorado expected to drop.
Peabody said, "In the last week, the company encountered difficult geology at Twentymile and is working with the U.S. Mine Safety and Health Administration on a new operating plan to manage through the conditions and resume production.
"The range of options could lead to significantly reduced longwall (coalface) production from the mine in the quarter."
Even so, Peabody has a history of giving conservative guidance, and with production estimated to be from 28 million-30 million tons of 2011 sales in Australia, that appears to be the same year ahead.
Peabody was trading at $62.55, falling $1.37, or 2.14 percent, as of 1:07 PM EDT.
Tuesday, April 19, 2011
Peabody's (BTU) Guidance Weak, Shares Drop
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Peabody Energy
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