Peabody Warning Still Somewhat In-Line (BTU)

Peabody Energy Corporation (NYSE: BTU) is issuing an earnings warning, but not from the normal logic behind most warnings.  The warning is said to be due to Australia weather-related events.  The first quarter financial results for the coal mining outfit are now expected to be near the low-end of the original targeted range of $500 to $600 million in EBITDA and adjusted diluted earnings of $0.50 to $0.75 per share.  Thomson Reuters has estimates of $0.66 EPS on $2.15 billion in total sales.

The company noted, “The target is based on recent storms and flooding in Queensland, which have halted port and rail movements, curtailed production at surface mines and restricted access to underground operations.  The company places early estimates of the impacts at approximately $50 million for the first quarter related to lower production and sales volumes and higher costs due to volume impacts and recovery expenses.  Actual quarterly results may vary depending on the pace of recovery from the flooding.”

Peabody shares are currently down about 1.1% at $30.21 against a 52-week trading range of $29.78 to $73.95.  With as low as these shares were. at some point you would expect the bad news to be priced into the stock.  The market value is almost $8.3 billion.

JON C. OGG