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Peabody Energy Corporation (NYSE:BTU) Announces Unexpected Profits As Coal Prices Recover

Boston, MA 10/18/2013 (wallstreetpr) – The biggest U.S. coal producer, Peabody Energy Corporation (NYSE:BTU) surprised investors and analysts as it announced a sudden profit in the third- quarter results. The prices for coal in the U.S. had shown improvements which accounts for this surprise profit of the electricity generating ore producer.

The St. Louis based company said that its earnings were 5cents per share if they excluded the one- time items. The company had a net income of 16 cents in the previous year whereas this time it had a net loss of 10 cents on every share in its third quarter. Its sales declined from $2.06 billion to $1.8 billion surpassing the analyst’s estimates of $1.78 billion. Although the prices in Powder River Basin have recovered this year, U.S thermal coal is still more cheap when compared to the prices the ore had a couple of years ago. Peabody also produces metallurgical coal whose prices are decreasing every year amidst an excess of supply.

Peabody generates more than 140 million tons of the ore every in a year from Powder River Basin, as mentioned on the company website. The Powder River Basin coal mining area is situated in Wyoming and Montana and the company operates the North Rochelle and Caballo mines here. The prices for thermal coal extracted from this region averaged to about $10.29 per metric ton in ICE Futures in the quarter that means they have increased by 23% as compared to last year. According to analysts, the impressively high outputs from this region will help Peabody to cross estimates with an exceptionally strong growth. Peabody is the first big producer in the U.S. which has already reported the quarterly earnings and has risen 1.1% to $17.89 in Ney York on 17 Oct. The shares had dropped 31% in the last year.

Published by Donna Fago

I believe in writing content Informing investors with the knowledge they need to invest better today- I have been following the markets for many years and was asked to join the team at recently due to my passion for the markets.

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