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TheStreet Open House

Peabody Energy (BTU) Reshuffles Exec Team

NEW YORK (TheStreet) -- Peabody Energy (BTU) announced it will reshuffle its executive team, with changes to take effect April 1.

Andrew Slentz, SVP of global human resources since 2010, has been promoted to executive vice president and chief human resources officer, reporting directly to CEO Gregory Boyce. Slentz will be responsible for organizational and employee benefits and compensation and facilities management.

SVP and chief information officer Lina Yong will now report to executive vice president and CFO Michael Crews, but will continue to direct the IT unit.

Meanwhile, several organization changes will be undergone, including reorganizing sales and marketing, trading, business development and strategy functions into two groups - global marketing and trading, and global development and strategy. Both groups will report to president and chief operating officer Glenn Kellow.

"This new structure enables our business units to focus even more intensely on safety, productivity, cost containment and operational excellence," said Boyce in a statement. "At the same time, we are committing dedicated groups to deliver integrated global customer solutions, portfolio optimization and growth initiatives."

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TheStreet Ratings team rates PEABODY ENERGY CORP as a Sell with a ratings score of D+. The team has this to say about their recommendation:

"We rate PEABODY ENERGY CORP (BTU) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, poor profit margins, weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Currently the debt-to-equity ratio of 1.54 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, BTU has a quick ratio of 0.57, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for PEABODY ENERGY CORP is rather low; currently it is at 15.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -32.45% is significantly below that of the industry average.
  • Net operating cash flow has decreased to $178.40 million or 20.21% when compared to the same quarter last year. Despite a decrease in cash flow PEABODY ENERGY CORP is still fairing well by exceeding its industry average cash flow growth rate of -52.18%.
  • BTU has underperformed the S&P 500 Index, declining 19.33% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, PEABODY ENERGY CORP's return on equity significantly trails that of both the industry average and the S&P 500.

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