TORONTO (miningweekly.com) – St Louis-based Peabody Energy doubled its earnings in the third quarter, mainly thanks to higher coal sales volumes from the group's Australian mines.
The biggest US coal miner said on Tuesday morning it has raised the midpoint of its 2010 earnings target, and now expects full-year earnings before interest, tax, depreciation and amortisation (ebitda) of between $1,85-billion and $1,9-billion, compared with the previous $1,7-billion to $1,9-billion range published in July.
Peabody reported third-quarter net income of $224,1-million, compared with $106,8-million a year ago.
Ebitda rose 67% year-on-year, to $571,3-million, and revenue increased to $1,86-billion, from $1,67-billion in the third quarter of 2009.
While ebitda from the US mines rose 6%, thanks to higher realised prices and better cost performance, the ebitda from Peabody's Australian mines nearly tripled year-on-year, to $323,2-million, after volumes and prices both rose and costs improved.
The group has been focusing on ramping up Australian output and sales to take advantage of Asian demand for coal.
"The global coal industry is in the early stages of a long-term supercycle, led by China and India," CEO Gregory Boyce said in a statement.
"Peabody's access to these key markets represents significant value-creation opportunity."
Peabody still expects to sell between 240-million and 260-million tons this year. The group reported 2009 sales of 244-million tons.
"Peabody Energy delivered strong third quarter results driven by strong metallurgical shipments, pricing from its Australian operations, better than expected overall cost controls, and expanding US margins," Jefferies & Co analyst Michael Dudas wrote in a note.
"Free cash flow generation was a strong $300-million with cash exceeding $1,3-billion"
Shares in Peabody rose 0,47% on Tuesday morning, to $51,77 apiece by 10:16 in New York.