Peabody Posts 30% Q2 Loss From Last Year

ST. LOUIS – Peabody Energy posted net income of 78 cents per share for the second quarter, a decline of nearly 30 percent from last year’s second quarter income of $1.10 per share. The St. Louis-based coal company reported $2 billion in revenues for the quarter, up $20 million over 2011’s second quarter revenues.

Peabody sold 400,000 fewer tons of coal in the second quarter 2012 than in the year-earlier second quarter. The loss comes from production declines in Peabody’s Western and Midwestern mining operations.

Peabody’s Australian mines saw modest gains, selling 1.7 million more tons this quarter than the second quarter 2011. However, prices for its Australian coal fell by 36%, cutting into anticipated revenues, Bloomberg reports. The introduction of a carbon tax in Australia also contributed to missed targets for Peabody.

With the domestic coal market on the fritz and the U.S. and European economies slumping, the company is looking to Chinese and Indian markets for help. In its earnings release, Peabody noted China’s net coal imports have increased 74 percent so far this year, and India’s electric generation from coal is up 11 percent and Europe’s up 12 percent.

The company said it expects a total of 90 gigawatts of new coal-fired power to come online globally during the year, which translates into an additional 300 million metric tons of coal demand worldwide.

Despite increasing demand worldwide for coal, Peabody is projecting its adjusted earnings per share to be between 20 cents and 45 cents for the third quarter 2012, a steep drop from last year’s third quarter adjusted earnings of 87 cents per share. The drop comes mostly from decreases in the price of coal, the Australian carbon tax, the timing of export shipments, and the relocation of a long wall mine in Colorado.

As of market close on Tuesday, Peabody’s stock was trading at $20.55, down 11.27 percent from Monday’s close.

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