Sep. 18, 2014, 3:39 PM
- Peabody Energy (BTU -4.6%) bumps off big early losses after saying it expects higher revenues/ton from the Powder River Basin next year than 2014 realizations due to strong contracting strategies built on layering in sales at attractive price levels.
- In an update on coal fundamentals and BTU's positioning, CEO Greg Boyce cites a fundamental mismatch in early reporting regarding China's new coal quality policies relative to the emerging view of its likely beneficial effects on Australian high-quality coal exports.
- BTU shares had sunk to multi-year lows after Goldman Sachs downgraded shares to Sell.
Sep. 18, 2014, 11:26 AM
- More on Goldman Sachs' downgrade of Peabody Energy (BTU -5.3%): The firm thinks coal prices are not yet close to the bottom, and it sees metallurgical coal falling as low as $120/metric ton during Q4 - bad news for all coal miners, but especially so for BTU and Alpha Natural Resources (ANR -4.1%).
- Goldman says it is focusing on three themes into year-end 2014: Avoid met coal stocks including BTU and ANR, given their high leverage and low-to-negative free cash flow; own sum-of-the-parts winners, reiterating its Buy ratings on SunCoke (SXC +1.9%) and Consol Energy (CNX -2%); prefer stronger balance sheets including SXC and CNX over weaker ones such as BTU and ANR.
- ETF: KOL
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Aug. 20, 2014, 4:57 PM
- An advertisement from Peabody Energy (NYSE:BTU) promoting coal as an energy source is misleading in its use of the phrase “clean coal,” according to the U.K.'s regulator for advertising standards.
- Upholding a complaint from the World Wildlife Fund, the regulator says consumers were likely to interpret the advertisement as a claim that “clean coal” processes don’t produce carbon dioxide or other emissions, and the ad must be changed before it runs again.
- The agency rejects a complaint from the WWF that BTU’s statement that “energy poverty” is the biggest human and environmental crisis was misleading and unsubstantiated.
Aug. 5, 2014, 7:49 AM
- Peabody Energy (NYSE:BTU) raises its Q3 guidance after deciding to trim back its metallurgical coal production in Australia.
- BTU now expects an adjusted Q3 loss of $0.36-$0.49 a share, better than its earlier forecast of a $0.40-$0.53 loss, and says it is reducing met coal output by ~1.5M tons/year from its Burton Mine in Queensland, Australia, as production levels from the mine are "not sustainable in the current market environment."
- BTU also expects to trim production levels to ~1M tons/year, cutting its annual average cost estimate for Australia to the low $70/ton range, as it plans to use reduced equipment fleets to target lower-cost reserves.
Jul. 29, 2014, 10:33 AM
- Arch Coal (ACI +3.5%) moves higher after its Q2 earnings loss came in better than expected as operating costs per ton fell 7%.
- Q2 sales fell 7% Y/Y to $713.8M, missing analyst consensus, but operating costs per ton fell to $20.55 from $21.19.
- ACI lowers its FY 2014 sales volume targets, including cutting its thermal sales volumes forecast to 124M-130M tons from 124M-132M tons to reflect the effects of transportation bottlenecks and the impact of a fall in steel production.
- Other coal names also are higher: ANR +4.3%, ARLP +2.4%, PVA +1.9%, WLB +1.9%, BTU +1.4%, RNO +0.9%, WLT +0.8%, KOL +0.4%.
Jul. 25, 2014, 10:56 AM
Jul. 22, 2014, 10:59 AM
- Peabody Energy (BTU +1.5%) moves higher after reporting a Q2 loss that was in line with estimates and a ~2% rise in revenue, helped by an increase in shipments and prices at its mining operations in the western U.S.
- Q2 U.S. mining revenue rose 6.2% to $1.03B, while revenue per ton gained 1.1%, but revenue from Australian mining operations fell 5% to $744.8M, with revenue per ton down 15%.
- Issues downside EPS guidance for Q3, now seeing a loss of $0.40-$0.53 vs. analyst consensus expectations for a $0.18 loss.
- Nevertheless, BTU sees market conditions improving, noting that coal's market share of global energy consumption is now 30%, highest since the 1970s, U.S. coal demand has been expanding for the past two years, and seaborne market fundamentals are seen improving into 2015.
Jul. 22, 2014, 8:02 AM
Jul. 21, 2014, 5:30 PM
Jul. 16, 2014, 2:18 PM
- Unloved Alpha Natural Resources (ANR +6.4%), Arch Coal (ACI +1.9%) and Peabody Energy (BTU +2.4%) are popping today thanks to China’s strong GDP reading and CSX’s solid earnings, but FBR analyst Mitesh Thakkar is not optimistic about the coal stocks heading into earnings.
- FBR expects most of the earnings calls to be focused on the two major challenges for coal producers - weak met coal pricing and rail service limiting steam coal volume - over and above company-specific issues.
- The firm lowers its 2014 EBITDA estimates by an average of 12% for the group, and cuts stock price targets for Cloud Peak Energy (CLD +1.2%) and Walter Energy (WLT +5.2%) by a dollar each, preferring steam coal names and/or low-cost met coal assets with solid balance sheets.
Jul. 9, 2014, 5:34 PM
- Peabody Energy (BTU) says it is still in talks with Nathan Tinkler about the sale of its Wilkie Creek mine in Queensland state, following a report that the former Australian billionaire missed a payment for the asset.
- BTU is said to have granted an extension to Tinkler and his New York-based financiers, although it’s not clear for how long.
- BTU agreed in May to sell the mine to Tinkler's company for $70M and the assumption of liabilities including rail and port obligations, but a June 30 deadline for the payment was missed.
Jul. 7, 2014, 12:44 PM
- Coal stocks suffer a beating after Deutsche Bank downgrades Peabody Energy (BTU -3.3%) to Hold from Buy with a $19 price target, down from $23, to reflect lower realized coal prices (particularly metallurgical coal) and anticipated ongoing cost pressures in foreseeable future.
- Consol Energy (CNX -1.7%) is the firm’s only Buy-rated coal stock because of the company’s “fast-growing natural gas business and solid financial position.”
- Although the Deutsche team says its focus is shifting to more company specific stories from an emphasis on sector performance, other coal companies are sharply lower: ACI -4.3%, ANR -4.8%, YZC -1.3%, CLD -2.4%, WLT -3.6%, RNO -1.5%, WLB -2%.
Jun. 6, 2014, 3:43 PM
- Consol Energy (CNX) shares rose to a nearly three-year high before pulling back, after Goldman Sachs raised its rating to Buy and cited CNX's strong free cash flow and growing position in the Marcellus fields.
- Goldman said CNX trades at a deep discount to its sum-of-the-parts value, and points to four pillars to its positive view: improving free cash flow in the coal segment, a major E&P production ramp, potential for asset sales and restructuring, and a strong balance sheet.
- Investors also are optimistic that CNX can weather the EPA's proposed cuts in carbon emissions at U.S. power plants; Sterne Agee thinks CNX is perhaps the best-positioned coal miner to meet the new requirements, "given its low-cost energy production and excess asset value."
- As Goldman praised CNX, it downgraded Peabody Energy (BTU -1.4%) and cut price targets for Alpha Natural Resources (ANR +0.7%), Arch Coal (ACI +3.8%)and Walter Energy (WLT +1.2%).
Jun. 6, 2014, 8:28 AM
- Consol Energy (CNX) +1.6% premarket after Goldman Sachs upgrades shares to Buy from Neutral with a $55 price target, up from $49, to reflect Marcellus and Utica production growth, strong free cash flow in coal and potential catalysts from the upcoming analyst day.
- However, Goldman downgrades Peabody Energy (BTU) to Neutral from Buy and cuts its price target to $15 from $21, citing its expectations for lower international thermal coal and met prices; BTU -1.4% premarket.
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