Earnings Preview: Peabody Energy

Peabody Energy (BTU) is expected to report Q3 earnings before market open Thursday, October 16, with a conference call scheduled for 10:00 am ET.

Guidance

Analysts are looking for a profit of 87c on revenue of $1.67B. The consensus range is 76c to 95c for EPS, and revenue of $1.51B to $1.84B, according to First Call. In July, when the company reported Q2 results, it gave FY08 EPS guidance of $2.50 to $3.00 per share. At that time, the company reaffirmed its FY08 production volume targets of 220M to 240M tons with sales of 240M to 260M tons, including 22M to 24M tons in Australia. Third quarter results are expected to reflect the full impact of higher prices for seaborne metallurgical and thermal coals and improving U.S. shipments. Positive drivers for Q3 results are strong global demand and tightening supplies. Negative influences for this quarter are possible lower prices for steam and metallurgical grade coal due to the global financial slowdown and increasing operating expenses.

Analyst Views

On September 12, Jefferies noted that the company is poised to benefit from increasing sales volumes and higher realized coal prices. The firm initiated Peabody with a Buy and an $85 price target.

Comments

[epeon:]

Spot prices have doubled since last year in the US. Prices have not significantly retraced the last two months. So, all US based companies should do well as the replace older longterm contracts with newer ones that are mudh more favorable.


In this environment, I think BTU will do well.

2008 Oct 15 02:55 PM