- Q2 2012 earnings of 73 cents per share compared to $1.16 per share a year ago.
- Year-over-year revenue growth of 0.9%.
- Operating expenses up 10.5% from a year ago.
- $500 million in cash.
- $6.27 billion in debt.
- Q3 earnings expected to be between 20 and 45 cents.
Broad Market Sell-Off
While earnings were somewhat disappointing, another factor in the sell-off was the price action in the broad market indices. The S&P 500, Dow, and Nasdaq all fell by nearly 1% on Tuesday. Given BTU's beta of 1.46, it was not surprising that the stock moved lower.
As the coal sector as a whole continues to move lower, I am becoming more inclined to agree with noted investor Wilbur Ross's negative view of the sector. It is interesting that coal stocks continue to hit new lows despite a more than 50% increase in natural gas prices from their recent lows. However, given the decline in coal stocks, it might be to late to sell the sector. For interested buyers, I believe that BTU is a better play than the more speculative ACI, ANR, or JRCC. Another high quality coal name to consider is Alliance Resource Partners (ARLP). For those looking to buy into coal, I would look to buy BTU or ARLP after a meaningful bullish reversal in the stock. Thus far, bottom fishing in the sector has not been much fun, so I would not be a buyer right now.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.