DOW JONES NEWSWIRES
Peabody Energy Corp.'s (BTU) second-quarter earnings fell a
bigger-than-expected 66% as demand remained weak, with President
Rick Navarre saying U.S. markets will take longer to rebound owing
to higher inventories.
That's why the company said Tuesday it plans to concentrate on
growing emerging markets in Asia. Chairman and Chief Executive
Officer Gregory H. Boyce said as a result of growth in Asia, it
expects to increase sales at its Australian operations next
year.
Shares fell 4.1% premarket to $33.40 as the quarter's results
missed analysts' estimates and the company projected 2009 earnings
below analysts' expectations.
Coal producers still face large stockpiles, though demand for
metallurgic coal used in steelmaking has improved somewhat.
Higher-priced long-term contracts may continue to lend some support
to revenue.
U.S. coal demand fell to the lowest levels since 2002 in the
first quarter, while production slid to mid-2005 levels, according
to the Energy Information Administration. Exports also weakened,
though some analysts say coal producers like Peabody may benefit
from improving demand in China and India.
Peabody, one of the world's largest coal producers, reported a
profit of $79.2 million, or 29 cents a share, down from $233.3
million, or 85 cents a share, a year earlier. Revenue decreased 12%
to $1.34 billion.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 49 cents on revenue of $1.43 billion.
Volume sold edged down by 100,000 tons to 59.5 million while
U.S. revenue per ton rose 4%.
As Peabody reiterated its 2009 production targets, it projected
earnings before interest, taxes, depreciation and amortization of
$1 billion to $1.2 billion. The mean estimate of analysts surveyed
by Thomson Reuters was $1.33 billion.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
tess.stynes@dowjones.com