Peabody Tanking Coal (BTU, KOL)

For the first quarter of 2009, Peabody Energy Corp. (NYSE:BTU) has reported EPS of $0.63 on revenue of $1.46 billion from 59.6 million tons of coal sold. Analysts estimates averaged an EPS of $0.93 on $1.62 billion in revenue.  The reaction here is enough that it is affecting the Market Vectors Coal ETF (NYSE: KOL).

Operating costs were also up, even as tons sold fell slightly compared with the first quarter of 2008. A bright spot for the company came in operating profit, which came in at $218.7 million for the quarter, compared with $182.9 million a year ago.

Net income for the quarter nearly tripled, from $57.9 million in 2008 to $175 million this year. Peabody’s operating profit per ton rose from $3.00 a year ago to $3.67 this year.

In the US, production from the Powder River Basin is down, as planned, by 2 million tons from a year ago and 4 million tons from the fourth quarter of 2008. Peabody notes that more than half of US coal producers have seen production fall by 8 million tons since the beginning of the year, and that that number “is likely to accelerate over the last three quarters.”

Peabody’s outlook for the rest of the year is in line with the industry as a whole. The company cut production estimates to 185-190 million tons in the US and 20-23 million tons in Australia, for total sales of 225-245 million tons. The previous total was 230-250 million tons. The company did not provide financial targets, citing uncertainty on deliveries and ongoing “carryover negotiations.”

The Market Vectors Coal ETF is down 1% at $16.50 this morning, at the bottom of a trading range of $9.43 to $60.30 over the last year.

Peabody’s shares are off more than 7% (-$2.19/share) at $27.15 in pre-market trading this morning. The stock’s 52-week trading range is $16.00-$88.69.

Paul Ausick
April 15, 2009