Energy

Coal Industry Ignores Positive Guidance From Peabody Energy

If there is any industry that is unloved by the current administration it is the coal industry. Coal is especially despised this week at the environmental climate change march in New York. Without any love this week, how is Peabody Energy Corp. (NYSE: BTU) beating out the rest of its industry?

Peabody Energy announced Tuesday that it now expects third-quarter 2014 adjusted EBITDA to fall within the range of $190 million to $210 million, which is above the company’s prior targeted range. Peabody also updated third-quarter estimates to between -$0.69 to -$0.63 earnings per share. This follows the effects of non-cash tax expense from the repeal of the Minerals Resource Rent Tax in Australia.

At first glance, Alpha Natural Resources Inc. (NYSE: ANR) would appear to be up 4% on the day, but looking at it historically it is bouncing off its 52-week low it set on Monday. Arch Coal Inc. (NYSE: ACI) is in the same boat as it has also recently been trading down around 2% to a new 52-week low.

Peabody Energy Chairman and CEO Gregory H. Boyce said this about the revision:

Peabody is pleased that strong cost improvements and operating results are leading to increased Adjusted EBITDA expectations even in the face of market challenges. Our operations are performing well as we experienced higher-than-expected results from the Western United States, improved performance from Australian metallurgical coal mines and continued cost reductions across the platform.

ALSO READ: Why China’s Insatiable Appetite for Coal Has Likely Peaked

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

Universally this is not being viewed as great news, as Market Vectors Coal ETF (NYSEMKT: KOL) is down on the day as well just before the noon hour at $17.67, a fall of 0.61% from the previous close of $17.78.

Arch Coal has as a consensus price target of $2.96 and a 52-week trading range of $2.36 to $5.37. It has a market cap of $503 million. Looking forward, Thomson Reuters has revenue estimates for the fiscal year 2014 of $2.93 billion and for the fiscal year 2015 of $3.17 billion.

Alpha Natural Resources has a consensus price target of $4.52 and a 52-week trading range of $2.60 to $8.30. It has a market cap of $615 million. The outlook for the company puts revenue estimates for the fiscal year 2014 at $4.16 billion and for the fiscal year 2015 at $3.89 billion.

Peabody Energy has a consensus price target of $18.82 and a 52-week trading range of $12.65 to $21.28. It has a market cap of roughly $3.53 billion. Looking ahead, the fiscal year 2014 has a revenue estimate of $6.67 billion and the fiscal year 2015 has a revenue estimate of $7.16 billion.

ALSO READ: UBS Sees 4 MLPs as Potential Acquisition Targets

Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.