VANCOUVER (miningweekly.com) – US coal producer Peabody Energy has reported a 10% slide in first-quarter earnings, despite a 10% improvement in revenues and a board decision to expand the share buyback programme from $500-million to $1-billion, the company announced on Wednesday.
The company’s NYSE-listed equity fell as much as 4.25% on Thursday morning as investors digested the lower profit of $106.6-million, or $0.83 a share, in the period ended March 31, compared with net income of $115.4-million, or $6.44, in the comparable year-earlier period.
Revenues for the first quarter rose to $1.46-billion, driven by improved seaborne coal pricing and increased metallurgical coal volumes.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 6.62% to $363.9-million in the recent quarter, up from $341.3-million a year earlier, the company reported.
"Peabody increased volumes, revenues and Adjusted EBITDA over 2017 levels and generated record free cash flow — in addition, today we are announcing the expansion of our share repurchase program to $1-billion after accelerating our existing $500-million buyback programme," Peabody president and CEO Glenn Kellow stated in an earnings conference call.
He added that the company’s first-quarter results reflected multiple achievements despite not operating at the company’s full potential, as it generated significant cash, sold non-core assets, released cash collateral, simplified the capital structure, initiated a quarterly dividend and accelerated buyback activities.
Peabody emerged from bankruptcy protection in April 2017, with $5-billion in reduced debt. It has been pinning its strategy to increasingly access to emerging Asian economies to offset falling North American demand for coal.
The St Louis, Missouri-based miner company has reported $5.6-billion in revenue in 2017, and operates 23 mines in the US and Australia.
The company’s NYSE-listed stock has gained nearly 22% since the start of the year, but on Thursday gave back some of its gains to change hands at $36.44 apiece.