Canaccord Genuity Afternoon Coffee on Peabody Energy (BTU): It's Christmas in July, and I Got Another Lump of Coal!
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Price: $27.61 +2.79%
Rating Summary:
7 Buy, 12 Hold, 7 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
7 Buy, 12 Hold, 7 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Afternoon Coffee on Peabody Energy (NYSE: BTU): It's Christmas in July, and I got another lump of coal!
Shares of Peabody Energy were in the red Tuesday (and down another 6.9% today) after the company’s Q2 results missed the mark and management provided disappointing guidance for Q3. Earnings came in at $0.51 per share versus the consensus forecast of $0.54 and Credit Suisse’s $0.52 estimate. Earnings in the quarter benefitted from lower than expected expenses, helping to offset weak results in Australia. Looking ahead, management forecast earnings of $0.20-0.45 per share while analysts were expecting $0.65 and Credit Suisse was looking for $0.83. The company’s Australian ops are expected to weigh on Q3 numbers with higher costs, lower overall pricing, a longwall move, the timing of export shipments and the introduction of a carbon tax being cited as reasons for weak results. Shares of Peabody have shed nearly 45% of their value this year as investors exit U.S. coal companies due to lower natural gas prices. Many power producers are shifting to gas as a cheaper source of power than coal, a move which analysts believe could be permanent. Coal demand remains strong in India and China, and Peabody is looking to expand in that area. It recently completed a $5 billion acquisition of Macarthur Coal to capitalize on strong Asian demand.
Shares of Peabody Energy were in the red Tuesday (and down another 6.9% today) after the company’s Q2 results missed the mark and management provided disappointing guidance for Q3. Earnings came in at $0.51 per share versus the consensus forecast of $0.54 and Credit Suisse’s $0.52 estimate. Earnings in the quarter benefitted from lower than expected expenses, helping to offset weak results in Australia. Looking ahead, management forecast earnings of $0.20-0.45 per share while analysts were expecting $0.65 and Credit Suisse was looking for $0.83. The company’s Australian ops are expected to weigh on Q3 numbers with higher costs, lower overall pricing, a longwall move, the timing of export shipments and the introduction of a carbon tax being cited as reasons for weak results. Shares of Peabody have shed nearly 45% of their value this year as investors exit U.S. coal companies due to lower natural gas prices. Many power producers are shifting to gas as a cheaper source of power than coal, a move which analysts believe could be permanent. Coal demand remains strong in India and China, and Peabody is looking to expand in that area. It recently completed a $5 billion acquisition of Macarthur Coal to capitalize on strong Asian demand.
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