Photo by: Duane Daws
TORONTO (miningweekly.com) – US coal producer Peabody Energy’s NYSE-listed stock was on Monday trending lower despite the company reporting a much narrower loss than what Wall Street analysts were expecting, mainly owing to lower costs at its Australian operations.
For the three months ended September 30, the St Louis, Missouri-based company reported a loss of $150.6-million, or $0.56 a share, compared with a year-earlier loss of $26.1-million, or $0.10 a share.
Excluding a foreign income-tax-related charge, Peabody posted a per-share loss of $0.59, which was better than its own expected adjusted per-share loss of between $0.63 and $0.69.
Wall Street analysts had, on average, expected an adjusted loss of $0.66 a share.
In the period, consolidated revenue fell 4.2% to $1.72-billion, exceeding analysts' expectations of $1.64-billion. The company's sales volume fell 9.6% to 62.5-million tons.
Peabody's US mining revenue fell 2.7% to $1.02-billion, while its revenue a ton rose marginally to $21.24. Revenue from Australian mining operations fell 4.1% to $676.3-million, with revenue a ton falling 13.4%.
Australian costs a ton fell 6% year-on-year, driven by improved longwall performance as well as cost and productivity programmes.
CEO Gregory Boyce on Monday said despite an oversupply in global coal markets and concerns over coal imports in China, India had the potential to become the fastest-growing coal importer.
China, the world's top coal importer, had earlier this month revealed that it would levy import tariffs on coal for the first time in nearly a decade. The new tariffs would add 3% on anthracite coal and coking coal, and 6% on noncoking coal, sending coal company stocks lower.
In the US, a mild summer and rail infrastructure capacity issues had impacted volumes and market activity; however, Southern Powder River basin customer stockpiles ended September at a nine-year low, prompting Peabody to expect improving logistics and rising volumes in the Southern Powder River and Illinois basins towards the new year.
The company tightened its 2014 sales outlook to between 245-million tons and 255-million tons, down from the top-end of up to 260-million tons expected previously.
Peabody stock on Monday closed down 5.17% at $10.46, having lost almost 44% in value since the start of the year, while the Dow Jones US Coal Index had only declined by 27% in the same period.