This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Earnings Preview: Peabody 4Q Profits Seen Lower

By JIM SUHR

ST. LOUIS (AP) â¿¿ Peabody Energy Corp., the world's biggest private-sector coal company, is expected to post lower earnings compared to a year ago, when it reports fourth-quarter results before the stock market opens Tuesday.

WHAT TO WATCH FOR: U.S. coal producers like Peabody struggled last year as historically low natural gas prices prompted many utilities to use it instead of coal for fuel, though Peabody said recently that electricity providers increasingly are switching back to coal.

Last month, Peabody announced that it expects a drop in coal prices and higher costs to result in "trough" earnings for the first-quarter, but its results should improve as this year progresses. The company forecast its first-quarter Australian costs to rise about 10 percent, while pricing of metallurgical coal used to make steel is expected to be down from levels of 2012's final three months, crimped by slower global demand for steel.

St. Louis-based Peabody expects its U.S. coal sales to fall by about 2 million tons as a result of lower market demand, with U.S. coal pricing expected to be down about 5 percent.

Underscoring the industry's headwinds, Goldman Sachs analyst Andre Benjamin, in a bearish research note last month, said he does not expect coal prices to return to more normal prices until the second half of 2014, instead of this year's final three months as previously expected.

Muddying matters is uncertainty about what lies in store for the industry during in the second term of President Barack Obama, who during his recent inaugural address said climate change was a priority. A series of environmental regulations proposed by the Obama administration could reduce the nation's coal use in addition to the pullbacks tied to competition from natural gas.

On the legislative front, federal lawmakers this month asked the Department of Interior to review by Feb. 4 whether companies are shortchanging federal and state governments on millions of dollars in royalties on coal exported to foreign markets. That move comes as U.S. coal exports hit record levels last year â¿¿ an estimated 124 million tons, according to Department of Energy projections.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs