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Peabody pushes to big gain as cost cuts, peace with Elliott offer hope

Feb. 05, 2020 6:58 PM ETPeabody Energy Corporation (BTU) StockBTUBy: Carl Surran, SA News Editor5 Comments
  • Peabody Energy (NYSE:BTU) closed +25.6% in today's trade after solidifying its relationship with top shareholder Elliott Management, adding two of the P-E firm's executives to its board, and taking steps to cut costs and live within its means for the coming year.
  • Peabody said it expects ~$250M in 2020 capex, which would be 12% lower than 2019, is suspending its dividends and plans no further stock repurchases under current conditions.
  • "We saw an improved performance from many of our operations in the fourth quarter, and although several mines are in transition, encouraging progress is being made on the ground," CEO Glenn Kellow said during today's earnings conference call.
  • The company's Q4 revenues declined "on lower seaborne metallurgical volumes and reduced pricing, [but] results were bolstered by solid cost improvements across four of our five operating segments," CFO Mark Spurbeck said. "In fact, seaborne met and seaborne thermal as well as the Midwestern segment reduced per ton cost by 10% vs. the prior year."
  • "We expect it to be an active 2020," Kellow said. "Our 2020 U.S. contract position gives us strength where we have approximately 96M short tons of [Powder River Basin] coal, fully priced."

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