At issue is whether companies violated federal leasing law by paying royalties based on the coal's mine price, then selling it overseas at a higher price through affiliated brokers. Peabody said it was fully compliant with federal royalty rules.In November, Peabody announced plans to close a 400-worker southern Illinois coal mine, saying the operation was "unsustainable" due to the mine's failure to meet acceptable standards for safety, compliance and performance. Peabody said that site sold 2.2 million tons of coal in 2011, a sliver of the 250.6 million tons the company took to market that year. WHY IT MATTERS: Peabody's earnings are closely watched because the company usually is among the first of the coal sector's big players to report earnings each quarter. It gives analysts and investors a snapshot of the industry's health, including an outlook for thermal coal demand used to produce electricity. WHAT'S EXPECTED: On average, analysts polled by FactSet expect Peabody's fourth-quarter profit to be $74.5 million, or 25 cents a share, on an adjusted basis, with revenue of $1.93 billion. EARLIER SHOWINGS: Peabody's profit in last year's quarter plummeted to $42.9 million, or 16 cents per share, compared with $274.1 million, or $1 per share, a year earlier. Income from continuing operations was 46 cents per share, topping the 34 cents per share forecast by analysts. Revenue was $2.06 billion. STOCK PERFORMANCE: Peabody shares rose 17.6 percent during the fourth quarter.