Wed, Feb. 4, 11:56 AM
- Metals trader Trafigura could make a bid for Peabody Energy (BTU +1.7%) in its push to gain market share as it seeks to become the world's largest coal trader, according to an EnergyPlugged article.
- The report speculates that BTU may need to look for a strategic partnership amid the weaker global coal market, which fits well into Trafigura’s business model of acquiring stakes in strategic companies and assets around the world.
- BTU has mining interests in the U.S. and Australia, which means the combined operations of BTU and Trafigura could boost the latter’s position in marketing thermal coal to China as well as other Asian countries.
Tue, Feb. 3, 10:46 AM
- Arch Coal (ACI +8.9%) opens sharply higher after reporting a smaller than expected Q4 loss as it cut costs to $16.46/ton from $18.10/ton in the prior-year quarter.
- ACI says it is suspending its annual dividend to preserve current levels of liquidity, although Cowen analysts say the suspension will save only ~$2M/year.
- ACI says it had available liquidity of ~$1.2B at year-end 2014.
- Expects costs in the Powder River Basin and Appalachian region, which account for most of its coal production, to fall in 2015, reflecting an improved rail performance, the impact of lower diesel prices and a full year of steady production at its low-cost Leer mine in West Virginia.
- ACI also says it expects capital spending of $145M-$160M in 2015, roughly flat vs. 2014's $147M in capex.
- Forecasts FY 2015 coal sales of 130M-143M tons after selling 134.4M tons in 2014 and 35.2M tons in Q4 (+9% Y/Y).
- Other coal names also are higher: ANR +7.8%, BTU +5.6%, CLD +2.3%, WLB +2.6%, WLT +9.4%, CNX +1.7%, RNO +4.3%.
Wed, Jan. 28, 11:53 AM
- Peabody Energy (BTU -3.5%) is downgraded to Hold from Buy at BB&T, which notes that the share price is hardly cheap considering it bakes in metallurgical coal prices ~11% above the most recent quarterly benchmark.
- BTU says that even under a higher met coal price scenario, BTU still would have estimated net debt/EBITDA of 6.6x and a negative free cash flow yield; the company's projected numbers and the anticipated macro environment for coal simply do not justify a Buy rating, the firm says.
Tue, Jan. 27, 11:28 AM
- Peabody Energy's (BTU -6.7%) move to slash its quarterly dividend to less than a penny a share is helping push coal company stocks (NYSEARCA:KOL) lower: WLT -1.6%, ACI -1%, CNX -1.8%, CLD -2%, WLB -5.4%, ARLP -1.2%.
- Cowen analysts see the move as "a prudent move amid uncertain coal markets," and Sterne Agee says the dividend cut will save BTU $100M in annual cash payments.
- Citigroup's Brian Hu maintains a Buy rating on BTU, saying that although management expects U.S. thermal coal demand to fall by 50M-60M tons in 2015, "BTU is better insulated due to their heavily contracted position and Y/Y improvement in Southern PRB rail performance.”
Tue, Jan. 27, 8:35 AM
- Peabody Energy (NYSE:BTU) -6.4% premarket after falling far short of expectations for Q4 earnings and reducing its quarterly dividend to $0.0025/share from $0.085.
- BTU says Q4 overall revenue fell 3.3% Y/Y to $1.68B while sales volume slipped 0.5%; revenue fell 2.2% to $983M in its U.S. mining operations as revenue/ton dropped 5.8%, while revenue declined 5.6% to $676M in its Australian mining operations as revenue/ton fell 17%.
- For 2015, BTU expects sales volumes of 245M-265M tons with U.S. operations seeing a 2%-4% decline in revenues/ton and costs/ton; expects Australia metallurgical coal sales of 15M-16M tons, export thermal sales of 12M-13M tons, and cost/tons lower by 2%-4%.
- Plans $180M-$200M in 2015 capex, mostly allocated to sustaining capital items; specific projects include the Gateway North extension to replace production from the existing operation, and the Wolf Creek development in Colorado.
- For Q1, BTU targets adjusted EBITDA of $160M-$200M and an EPS loss of $0.39-$0.32 vs. analyst consensus estimate for a $0.24 loss.
Tue, Jan. 27, 8:12 AM
Tue, Jan. 27, 8:06 AM
Mon, Jan. 26, 5:30 PM
Mon, Jan. 26, 3:46 PM
- Peabody Energy (BTU +4.6%) is upgraded to In-line from Underperform with a $6.50 price target, raised from $6, at Imperial Capital, seeing BTU's free cash flow profile to equity improving over time as hedges roll off.
- The firm remains concerned about the impact of a dividend cut, coal headlines, and $3 natural gas in the U.S., but also says it is aware of a number of bullish factors for nat gas in H2 2015, including export demands that could improve.
Fri, Jan. 23, 12:53 PM
- Peabody Energy (BTU -5.6%) is downgraded to Negative from Stable at Standard & Poor's, based on the rating agency's view that metallurgical coal prices will remain depressed for at least another year.
- In light of updated price assumptions, the firm believes it is less likely that BTU can improve its credit measures to fall in line with the current aggressive financial risk profile assessment within the next 12 months.
- S&P reaffirms its BB- corporate credit rating on the company.
Thu, Jan. 22, 10:17 AM
- Peabody Energy (BTU -1.9%) says President/COO Glenn Kellow has been named President and CEO-Elect and will become CEO effective May 4.
- Kellow joined BTU in 2013 after a 28-year career with BHP Billiton, where he ultimately served as president of the multinational aluminum and nickel business with operations in South Africa, Australia, Mozambique and Colombia.
- Current Chairman and CEO Gregory Boyce will remain as Executive Chairman.
Wed, Jan. 14, 12:39 PM
- Citi cuts price targets for iron ore to $58 for 2015 and $62 for 2016, down from its prior estimates of $65 for both years, and lowers its outlook for thermal and met coal.
- Citi warns its downwardly revised forecast means it now expects earnings for major mining companies will fall by 9%-21% for 2015 and by 3%-16% in 2016.
- Rio Tinto (RIO -2.5%) is the exception, as Citi sees earnings rising 7.1% this year and 10.6% next year due to the company’s greater exposure to the weaker Australian dollar.
- The firm cuts its price target for Glencore (OTCPK:GLCNF -7.2%) by 8% to £3.60 from £3.90 and sees earnings falling 21% and 16% respectively in 2015 and 2016.
- Citi says it is still bullish on the sector, but warns that metals and mining companies will only slowly grind higher over the next few years.
- Also: BHP -4.5%, VALE -5%, FCX -12%, SCCO -4.9%, TCK -9.7%, CLF -4.4%, CENX -9.1%, MT -4.2%, X -4.9%, NUE -3.4%, STLD -2.6%, BTU -9.8%, ANR -8.8%, ACI -8.9%.
Tue, Jan. 13, 7:14 PM
- The Obama administration reportedly plans to require the oil and gas industry to cut methane emissions by as much as 45% over the next decade, with the EPA expected to issue proposed regulations this summer and final regulations by 2016.
- The proposal would be a victory for environmental groups that have lobbied the administration to force the oil and gas industry to cut emissions of methane, a powerful greenhouse gas tied to climate change.
- Potentially related tickers include KOL, BTU, WLT, CNX, ACI, ANR, YZC, ARLP, AHGP, NRP, PVG, PVA, OXF, CLD, WLB.
Thu, Jan. 8, 2:33 PM
- It’s time for investors to start looking for entry points in quality coal miners such as Consol Energy (CNX +1.5%), Cloud Peak Energy (CLD +4.1%) and Peabody Energy (BTU -0.2%), J.P. Morgan says in the hope that funding problems now confronting the U.S. shale revolution will lead to a more balanced U.S. gas market and better prospects for coal.
- While the seaborne market is lackluster, JPM believes it sees a positive story emerging for the U.S. coal industry due to the changing landscape in U.S. E&P driven by falling oil prices, which should lead to a tighter natural gas market in late 2015 and beyond and spark positive movement in depressed coal names.
Wed, Jan. 7, 7:35 PM
- Energy bonds have become one of the riskiest sectors in the bond market, as the cost of buying five-year credit default swaps protecting $10M of bonds has jumped from $139K/year last June to $377K today for companies in the S&P/ISDA CDS U.S. Energy Select 10 Index.
- The index consists of 10 large major energy companies: APC, APA, CHK, COP, DVN, OTCQB:FSTO, HAL, BTU, VLO and WMB.
- Even though most of the companies boast investment-grade ratings, it now costs more to insure bonds in that index against default than it costs to insure bonds of an average junk-rated company, according to S&P.
Dec. 29, 2014, 10:26 AM
- Pummeled this year thanks to slumping coal prices, a general rout in commodities names, and (in some cases) bankruptcy fears, coal stocks are seeing bargain-hunters emerge on a quiet late-December trading day.
- Gainers: CLF +8.2%. WLT +4.6%. ACI +3.3%. BTU +2.1%. ANR +3.8%.
- On SA, Equity Watch recently argued more pain is in store for the U.S. coal industry 2015, given the April implementation of MATS regulations, declining thermal coal demand (due to the retiring of coal-fired plants), and an unfavorable global supply/demand balance for metallurgical coal. The author does, however, think rising Asian demand could provide some relief for U.S. firms.
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