Earnings Preview: Peabody Energy Reports Q4 Results Tuesday

Jan.23.12 | About: Peabody Energy (BTUUQ)

Peabody Energy Corporation (BTU) is due to report earnings before the opening bell on January 24, 2012. Below we can see the results of Peabody Energy over the last few earnings periods.

Peabody Energy Corporation, through its subsidiaries, engages in the exploration, mining and production of coal. The company mines and sells thermal coal to electric utilities and metallurgical coal to industrial customers. The company was founded in 1883 and is headquartered in St. Louis, Missouri. BTU trades an average of 5 million shares per day.

52 Week High: $73.95
52 Week Low: $30.60
Book Value: $19.53
Float Short: 4.13%

Analysts are expecting an improvement of $0.37 in earnings per share compared to last quarter's results of $0.94. The number to beat is $1.31 per share, based on the estimated mean earnings. Analyst estimates range between $1.18 and $1.45 per share.

Relative to the earnings, investors have not been as aggressive accumulating shares, as the current trailing twelve months P/E ratio is 10.4, while the forward P/E ratio is now 7.33. The stock recently broke through above the falling 90 day moving average. Energy certainly has been volatile and coal having a constant target on its back from environmentalists doesn't help matters. I believe if natural gas prices continue to remain low and I believe they will, coal prices are likely to remain under pressure throughout 2012. The upside is this is already priced in. With a forward PE in single digits, now may be about the best time to look at Peabody if viewed as a long term core holding. The yield is nothing to write home about, but at least an investor can add exposure to coal and get paid about 1% a year to do so. If coal moves higher the stock is positioned to move up right along with it.

The company has rising revenue year-over-year of $6.86 billion for 2010 vs. $6.01 billion for 2009. The bottom line has rising earnings year-over-year of $774.00 million for 2010 vs. $448.20 million for 2009. The company's earnings before interest and taxes are rising with an EBIT year-over-year of $1.33 billion for 2010 vs. $844.80 million for 2009. Rising revenue along with rising earnings are very good signs and what we want to see with our companies. Be sure to check the margins to make sure that the bottom line is keeping up with the top line.

Here is a look at the fiscal year revenue.

paid2trade.com revenue gross bar chart for BTU Click to enlarge

Gross reported revenue compared to the mean estimate (rounded).

Fiscal Quarter Ending Month-Year Revenue Estimates Actual $ Difference Difference %
Sep-11 $ 2.02 B $ 2.04 B $ 16.16 M 0.8%
Jun-11 $ 2.01 B $ 2.01 B $ -5.51 M -0.27%
Mar-11 $ 1.74 B $ 1.74 B $ 4.64 M 0.27%
Dec-10 $ 1.78 B $ 1.82 B $ 36.56 M 2.05%
Sep-10 $ 1.86 B $ 1.86 B $ 9.46 M 0.51%
Click to enlarge

M = millions, B = billions

Differences are rounded. (Some one-time items are often excluded in reported EPS.)

paid2trade.com Quarterly Estimates And Actual EPS results BTU Click to enlarge

Reported earnings per share compared to the mean estimate. Differences are rounded.

The total short interest number of shares for BTU.

paid2trade.com short interest tool. The total short interest number of shares for BTU Click to enlarge

The number of days to cover short interest based on average daily trading volume for BTU.

paid2trade.com number of days to cover short interest based on average daily trading volume for BTU Click to enlarge

Please feel free to share your thoughts and comments.

I use a proprietary blend of technical analysis, financial crowd behavior and fundamentals in my short-term trades, and while not totally the same in longer swing trades to investments, the concepts used are similar. You may want to use this article as a starting point of your own research with your financial planner. I use Seeking Alpha, Edgar Online and Yahoo Finance for most of my data. I use the "confirmed" symbols from earnings.com that I believe to be of the most interest.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.