Peabody Energy

Shares of Peabody Energy (BTU - Get Report) got singed Thursday after the coal giant warned that its third-quarter sales and earnings would be lower than previously forecast.

Peabody's stock price dropped 11% to $16.56 after the largest U.S. coal company said third-quarter sales would be "materially lower" than they were in the second quarter.

The company cited three major factors pushing down sales and earnings in the third quarter, including a mining venture that has proven more challenging than anticipated, falling prices for some types of coal, and decisions by customers to push off the delivery of some shipments.

Peabody said it suffered a "significant delay" in restarting and ramping up production at its Australian mine after a death there in June following a "highwall failure." That alone should shave $30 million to $35 million off the company's earnings for the third quarter, Peabody said.

The coal company said it is also grappling with "reduced pricing in seaborne met and thermal coal," as well as customers deferring the delivery of some coal shipments.

"Third quarter met coal volumes are now expected to be modestly below second-quarter levels," Peabody said.

The company also said it had begun the process of refinancing a term loan and revolver to help pay for an upcoming joint venture in Colorado with Arch Coal (ARCH - Get Report) .