Peabody’s (BTU) diversified global platform continues to deliver solid cash flows and earnings

Peabody Energy (NYSE: BTU) reported second quarter 2012 revenues of $2.0 billion, leading to adjusted EBITDA of $453.4 million. Income from continuing operations totaled $215.3 million, with diluted earnings per share from continuing operations of $0.78 and adjusted diluted earnings per share of $0.73.

• Consolidated revenues of $2.0 billion lead to adjusted EBITDA of $453 million
• Diluted EPS from continuing operations totals $0.78; Adjusted diluted EPS of $0.73
• 2012 U.S. production remains fully priced; 70% to 75% priced for 2013 at current production levels
• 2012 capital targets reduced $200 million since January to $1.0 billion to $1.2 billion
• Repurchased $242 million of debt and $100 million of shares during the quarter

“Peabody’s diversified global platform continues to deliver solid cash flows and earnings in a choppy market environment,” said Peabody Energy Chairman and Chief Executive Officer Gregory H. Boyce. “While we see some bright spots within the global coal markets, there remain macroeconomic and industry challenges that Peabody is well positioned to weather given our global position and financial strength. In the United States, we have increased earnings contributions even in the face of lower volumes. And in Australia, we are addressing challenges through a number of initiatives to further strengthen our growing long-term platform.”

BTU – Results from Continuing Operations

Second quarter sales volumes were 57.4 million tons, on par with the prior year as increases from Australia and Trading and Brokerage offset lower U.S. production. U.S. shipments were down slightly from the prior year due to market-driven production cutbacks and negotiated customer settlements. U.S. revenues rose 4 percent, driven by higher realized prices in both the Midwestern and Western regions.

Australian revenues rose 3 percent on a 26 percent increase in volumes related to expanded and acquired operations, which overcame a 19 percent decline in realized coal pricing resulting from lower benchmark settlements. Australia shipments totaled 8.2 million tons, including 3.6 million tons of metallurgical coal and 2.7 million tons of seaborne thermal coal.

Adjusted EBITDA totaled $453.4 million compared with $599.1 million in the prior year.

U.S. mining adjusted EBITDA rose 27 percent to $273.4 million due to higher revenues and cost containment efforts that resulted in increased margins in both the Western and Midwestern regions.

Australian mining adjusted EBITDA of $240.4 million was impacted by approximately $140 million related to lower realized pricing in the second quarter compared with record levels realized in 2011, partly offset by higher volumes from expanded and acquired operations. While Australia volumes increased nearly 2 million tons, costs increased 10 percent due to production challenges at contractor-operated mines and costs associated with overburden removal as part of planned corrective actions at acquired operations.

About Peabody Energy – BTU

Peabody Energy (BTU) is the world’s largest private-sector coal company and a global leader in sustainable mining and clean coal solutions. BTU serves metallurgical and thermal coal customers in more than 25 countries on six continents.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.