Peabody Energy (BTU) Reports Q2 Revenues Miss

Peabody Energy (NYSE: BTU) reported Q2 revenue for the quarter came in at $626.7 million versus the consensus estimate of $697 million.

"Over the past quarter, we have remained committed to the health and safety of our employees and communities in which we operate, while also taking further action to improve our cost structure," said President and Chief Executive Officer Glenn Kellow. "Our U.S. thermal operations have done a tremendous job of adapting to significantly lower demand, while our seaborne operations have remained pressured by the economic impacts of the COVID-19 pandemic. Continued uncertainty in global markets requires us to further improve our operating performance and ensure we have a scalable structure that can respond to market conditions in the months ahead."

Outlook

Given continued uncertainties with respect to COVID-19, including the duration, severity, scope, and necessary government actions to limit the spread, Peabody is continuing its suspension of full-year 2020 guidance targets.

Based on current customer nominations, Peabody has the following sales priced for delivery in 2020:

• 87 million tons of PRB coal priced at an average price of $11.36 per ton, implying 46 million tons to be delivered in the second half of 2020.
• 18 million tons of other U.S. thermal coal priced at an average price of $36 per ton, implying 9 million tons to be delivered in the second half of 2020.
• 7.2 million tons of seaborne thermal coal priced at an average price of $58 per short ton, implying 2.1 million of already priced tons to be delivered in the second half of 2020.

Ultimately, deliveries will be dependent on general economic conditions, weather, natural gas prices and other factors. Peabody continues to closely monitor volumes and is aggressively protecting its contractual rights.

The company remains focused on preserving cash and operational liquidity during these challenging times. Full-year SG&A expense is now expected to be approximately $110 million, while 2020 capital expenditures have been reduced to $200 million. The company is maintaining full compliance with all regulatory reclamation requirements, but given operational sequencing is lowering its 2020 ARO cash spend to $50 million. While Peabody now expects lower SG&A, capital and ARO expenditures, further action is required. The company remains committed to repositioning its cost structure in light of reduced demand and lower pricing.

For earnings history and earnings-related data on Peabody Energy (BTU) click here.

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