UPDATE: Peabody Energy 2Q Net Up 38%, Raises Full-Year Guidance
19 Luglio 2011 - 7:31PM
Dow Jones News
Peabody Energy Corp.'s (BTU) second-quarter profit rose 38% as
higher coal prices and increased sales in Australia outweighed the
drag from disruptions due to flooding in the U.S.
The largest U.S. coal producer by output raised its full-year
earnings projection to $4.20 to $4.60 a share. Its April guidance
called for $3.50 to $4.50. For the third quarter, the company
predicted earnings of $1.05 to $1.25 cents a share, below analysts'
estimated $1.40 a share.
Peabody recently has been named in a set of deals that would
expand its access to booming markets in Asia.
Earlier this month, the company made a joint bid with
ArcelorMittal (MT, MT.AE) to acquire Australian coal miner
Macarthur Coal Ltd. (MCC.AU) for $5.05 billion. Peabody is in
negotiations with the Mongolian government to develop the Tavan
Tolgoi coal mine, one of the world's largest untapped coal
deposits. And last week Peabody said it had entered into an initial
agreement with the government of Xinjiang Uighur Autonomous Region
in northwestern China to develop a large open-pit coal mine.
Peabody executives left the door open to further acquisitions,
with Chief Executive Gregory Boyce on Tuesday highlighting the
company's preference for assets that can easily access global
export markets.
"We have a high preference for those areas and those products
that can access seaborne markets," Boyce said on a conference call
to discuss the company's second-quarter results. The company's
recently announced developments in China are both "in close
proximity to the fastest (growing) and largest coal markets in the
world," he added.
Rapid growth in China and India continues to underpin rising
global demand for coal for steelmaking and electricity
generation.
For the second quarter, Peabody posted a profit of $284.8
million, or $1.05 a share, up from $206.2 million, or 76 cents a
share, a year ago. The most recent quarter includes $24.5 million
in litigation charges. Excluding remeasurement expenses, earnings
from continuing operations rose to $1.11 from 69 cents. The company
in April forecast earnings between 85 cents and $1.10, below
analyst estimates at the time.
"With another solid quarter, and a sizable guidance raise, we'd
expect Peabody to be fairly strong," Brean Murray, Carret & Co.
analyst Jeremy Sussman said in a note. "We remain buyers of
Peabody."
Revenue rose 21% to $2.01 billion, matching analyst
estimates.
Operating margin widened to 22.8% from 19.5%, and operating
profit per ton jumped 45%. Revenue per ton in the U.S. increased 3%
as revenue per ton in Australia increased 38%.
Flooding and rail transportation constraints limited sales in
the U.S. Midwest and Wyoming's Powder River Basin. The company said
it also faced increased operating costs in its Australian business
because of a stronger Australian dollar and lingering logistical
difficulties after widespread flooding earlier this year.
Peabody's also received a boost from strong results in its
trading and resources management operations, which posted revenue
of $114 million, up 40% from 2010 levels.
Shares were up 0.5% at $60.17 in midday trading. The stock has
gained 42% over the past year through Monday's close.
-By Matt Day and Nathalie Tadena, Dow Jones Newswires;
212-416-4986; matt.day@dowjones.com
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