Peabody Reports $1B 4Q Loss; Shares Still Jump
ST. LOUIS (AP) â¿¿ Coal producer Peabody Energy Corp. lost $1.01 billion in the fourth quarter as the price of coal used in steel manufacturing fell by half from its 2011 high.
The company said there have been signs of recovery in coal prices but from very low levels. Those low prices prompted it to write down the value of some assets during the quarter, which deepened its loss.
The company's first-quarter outlook was short of Wall Street expectations, but the company said it expects earnings to rise this year as demand and prices improve. It didn't give a specific earnings forecast.
Peabody shares rose 93 cents, or 3.7 percent, to $26.09 in morning trading. Shares had dropped about 30 percent over the past 52 weeks.For the quarter that ended in December, the St. Louis company's loss was $3.78 per share and compared with net income of $222.4 million, or 82 cents per share, a year earlier. The company said that excluding the cost of closing down mines and marking down the value of some of its assets, the loss would have been $1.12 per share. Revenue fell 9.5 percent to $2.02 billion from $2.23 billion. Analysts expected earnings of 25 cents per share on revenue of $1.93 billion, according to FactSet. Peabody said it was encouraged by a pickup in economic growth in China and expects coal demand in the U.S. to rise as prices increase for natural gas, a fuel that competes with coal for use in generating electricity. It also expects a boost from international demand for coal used in power generation. The company has pulled back in the United States while increasing business in Australia. It expects higher demand for coal used in power generation, especially in Australia and Indonesia. The company said it expects earnings to rise as 2013 unfolds due to expected increased production in Australia and higher prices. It didn't give a forecast of earnings per share. Analysts expect the company to earn 96 cents per share in 2013 on revenue of about $8 billion.
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