New York: Coal miner Peabody Energy Corp said on Thursday that first-quarter operating profit rose, beating Wall Street estimates, because of higher prices and volumes of steel-making coal from its Australian mines.
Peabody, whose coal fuels 10% of US electricity generation and 2% of worldwide electricity, said it planned to increase Australian production of metallurgical coal this year because of robust demand from global steelmakers.
“With rising Australian volumes and pricing and a growing global trading and brokerage business, we have enormous capacity to capitalize on expanding Asian coal demand,” said chairman and chief executive officer Gregory Boyce.
“We have the leading position in the lowest-cost US regions, with leverage to improving prices as the economy recovers.”
First-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) rose 10% to $357.2 million and adjusted earnings, excluding items, were 52 cents per share, the St Louis-based company said.
Net income was $136.7 million, or 50 cents per share, compared with $175.2 million, or 63 cents per share, a year earlier. Revenue rose to $1.52 billion from $1.45 billion.
Analysts on average were expecting adjusted earnings of 41 cents per share and revenue of $1.516 billion, according to Thomson Reuters.
The company’s stock slipped 85 cents to $45.75 in electronic trading before the New York Stock Exchange opened.
Peabody said it continues to target 2010 sales of 240 million to 260 million tons, including US sales of 185 million to 195 million tons and higher Australian sales of 27 million to 29 million tons.
The company is targeting 2010 EBITDA of $1.6 billion to $1.9 billion with adjusted earnings of $2.45 to $3.15 per share, excluding currency remeasurement. Analysts currently expect full-year 2010 earnings of $3.06 per share.
“We anticipate higher revenues and earnings from new contract settlements and rising metallurgical coal volumes in Australia,” said Boyce.
Peabody, which has expanded operations in Australia in recent years, is currently trying to acquire Australian coal miner Macarthur Coal Ltd.