Peabody Energy Corp.'s (BTU) first-quarter earnings fell 2.2% on acquisition-related charges and bad weather, masking a jump in revenue and Australian mining sales.
For the year, the coal company lowered its sales outlook, seeing total sales of 235 million to 255 million tons, from its January projection of 245 million to 265 million tons. For the current quarter, the company sees adjusted per-share earnings of 40 cents to 65 cents. Analysts polled by Thomson Reuters recently saw per-share earnings of 59 cents.
Investors have fled U.S. coal companies in recent months. With natural gas prices hovering near 10-year lows, power plants are switching from coal, and many analysts believe the shift could be permanent. Increased environmental regulation and rising costs have compounded coal companies' challenges.
Demand from China and India remains strong. Peabody, which produces more coal than any other U.S. company, has been aggressively expanding its footprint in Asia. It recently completed its roughly $5.05 billion acquisition of Australia-based coal-mining company Macarthur Coal Ltd.
But the company said earlier this year that the Macarthur mines didn't meet industry standards, and warned that first-quarter earnings would be weighed down by the cost of upgrades, as well as production and transport delays caused by flooding in Queensland.
For the latest period, Peabody reported earnings of $172.7 million, or 63 cents a share, down from $176.5 million, or 65 cents a share, a year earlier. Excluding items related to the remeasurement of foreign income tax, earnings from continuing operations fell to 67 cents a share from 72 cents.
The company had most recently projected adjusted earnings from continuing operations on the low end of 50 cents to 75 cents a share.
Revenue increased 17% to $2.04 billion. Analysts polled by Thomson Reuters expected revenue of around $2.09 billion.
Global sales edged higher to 61.7 million tons on Australian mining output, thanks in part to the Macarthur acquisition. U.S. mining revenue rose 5.2% to $1.27 billion as revenue per ton increased 7.2%. In Australia, mining revenue jumped 48% to $854.1 million, and revenue per ton jumped 27%.
Shares edged higher in premarket trading to $28.74. Through Wednesday's close, the stock is down 14%.
-By Kristin Jones; Dow Jones Newswires; 212-416-2208; firstname.lastname@example.org