As the first of the U.S. coal miners to report — and the largest — Peabody’s results offer an opportunity to look at Alpha Natural Resources Inc. (NYSE: ANR), Arch Coal Inc. (NYSE: ACI), CONSOL Energy Inc. (NYSE: CNX), James River Coal Co. (NASDAQ: JRCC), Walter Energy Inc. (NYSE: WLT) and Cloud Peak Energy Inc. (NYSE: CLD). All these stocks are getting a boost today from Peabody’s results.

In its press release, Peabody noted a decline in Australian pricing in the quarter, but a rise in shipments. U.S. revenues were down 12% on a 6% drop in shipments. But Peabody expects a change going forward.

For the remainder of 2013, Peabody expects coal to recapture the “majority” of the demand it lost to natural gas in 2012. Rising U.S. prices for natural gas have returned coal to is low-cost status as a fuel for power generation. Demand from coal-fired plants rose 15% in March, while natural gas demand fell by 16%.

Given Peabody’s surprising results, a look at the other coal miners might provide some insight into the sector ahead of more earnings reports. Unlike Peabody, none of these firms has Australian operations to figure into the equation.

Alpha Natural Resources is expected to post an EPS loss of $0.59 on revenues of$1.32 billion. The company’s expected loss has narrowed from $0.67 three months ago, but given Peabody’s drop in shipments, Alpha’s revenue, projected to drop more than 30% year-over-year in the first quarter, could be weaker than expected. Alpha reports earnings on May 1.

The consensus first-quarter estimates for Arch Coal calls for an EPS loss of $0.34 on revenues of $912.03 million. The expected loss has widened from $0.30 in the past three months, and the revenue estimate is 12% lower than last year’s first quarter total. Arch reports earnings next week.

CONSOL Energy is expected to post first-quarter EPS of $0.18 on revenues of $1.25 billion. The EPS estimate has come down $0.02 in the past three months, and the estimated EPS is way down from $0.42 in the same period a year ago. CONSOL has been somewhat insulated from the harsh treatment for coal because the company also produces natural gas and some liquids. CONSOL reports results next week.

James River is expected to post an EPS loss of $1.63 on revenues of $192.64 million when it reports earnings on April 29. Revenues are expected to be nearly a third lower than a year ago and EPS is more than three times worse. Analysts expect little from James River this quarter, and it is very likely the company will deliver on those expectations.

Walter Energy is expected to post an EPS loss of $0.88 on revenues of $505.55 million when it reports on earnings on May 1. Expectations have fallen from an EPS loss of $0.48 just three months ago. In the first quarter a year ago, Walter Energy posted EPS of $0.65.

Cloud Peak reports earnings on April 30 and is expected to post EPS of $0.28 on revenues of $353.29 million. Revenues are expected to be down more than 5% year-over-year, and EPS expectations to have fallen from $0.37 just three months ago. Over the past 12 months, however, Cloud Peak is the only one of these companies to put up share price growth. Shares are up about 34%, compared to a drop of 70% at Walter, 64% at James River, 55% at Alpha, 49% at Arch, 27% at Peabody and about 5% at Consol.

Peabody’s shares are up 9% just before noon today, at $20.43 in a 52-week range of $18.56 to $31.97.

Alpha’s shares are up 5.3%, at $7.21 in a 52-week range of $5.28 to $17.30.

Arch’s shares are up 8.8%, at $4.95 in a 52-week range of $4.47 to $10.26.

CONSOL’s shares are up 4.4%, at $32.70 in a 52-week range of $26.41 to $37.39.

James River’s shares are up 6.8%, at $1.74 in a 52-week range of $1.46 to $5.89.

Walter Energy’s shares are up 2.2%, at $18.95 in a 52-week range of $18.21 to $69.41.

Cloud Peak’s shares are up 4.3%, at $18.95 in a 52-week range of $13.65 to $22.31.

The U.S. dollar index rose 0.47% today, now at 80.462. The GSCI commodity index is up fractionally at 679.20, with commodities prices mixed again today. WTI crude oil closed up 0.3% today, at $97.31. Brent crude trades up 0.1% at $117.94 a barrel. Natural gas is down 4.1% today at about $3.17 per million BTUs following a smaller-than-expected draw on inventories (more coverage here). Gold settled down 0.6% today at $1,635.50 an ounce, its lowest settlement since August 20th.

The unofficial closing bells put the DJIA down about 9 points to13,974.31 (-0.06%), the NASDAQ rose about 2 points (0.06%) to 3,198.67, and the S&P 500 rose 0.07% or about 1 point to 1,521.41.

There were a several analyst upgrades and downgrades today, including Colgate-Palmolive Co. (NYSE: CL) started as ‘sell’ at Canaccord Genuity; Nvidia Corp. (NASDAQ: NVDA) cut to ‘hold’ at Needham; Lockheed Martin Corp. (NYSE: LMT) cut to ‘neutral’ at Cowen; Dell Inc. (NASDAQ: DELL) cut to ‘market perform’ at Raymond James; and Verizon Communications Inc. (NYSE: VZ) raised to ‘outperform’ at Raymond James.

Earnings reports since markets closed last night resulted in several price moves today, including these: Applied Materials Inc. (NASDAQ: AMAT) is up 1.1% at $13.93 after posting a new 52-week high of $13.99 earlier today (more coverage here); Avis Budget Group Inc. (NASDAQ: CAR) is up 5.8% at $24.39 after posting a new 52-week high of $24.90 earlier today; Cisco Systems Inc. (NASDAQ: CSCO) is down 0.9% at $20.96 (more coverage here); Cloud Peak Energy Inc. (NYSE: CLD) is down 1.4% at $16.72; Intrepid Potash Inc. (NYSE: IPI) is down 6% at $22.10; Kinross Gold Corp. (NYSE: KGC) is up 6.2% at $8.38; Metlife Inc. (NYSE: MET) is down 1.8% at $36.84 (more coverage here); NetApp Inc. (NASDAQ: NTAP) is down 0.3% at $35.72; Pioneer Natural Resources Co. (NYSE: PXD) is up 2.8% at $130.26 after posting a new 52-week high of $133.68 earlier today; TripAdvisor Inc. (NASDAQ: TRIP) is down 7.3% at $43.50; Zillow Inc. (NASDAQ: Z) is up 9.3% at $42.59 after posting a new 52-week high of $47.85 earlier today; Alpha Natural Resources Inc. (NYSE: ANR) is up 13.8% at $9.66 (more coal coverage here); Barrick Gold Corp. (NYSE: ABX) is up 3% at $32.54 (more coverage here); DirecTV (NASDAQ: DTV) is down 3.2% at $50.00; General Motors Co. (NYSE: GM) is 3.4% at $27.71 (more coverage here); and PepsiCo Inc. (NYSE: PEP) is up 1.2% at $72.34 (more coverage here).

After markets close today and before they open tomorrow morning we are scheduled to hear from CBS Corp. (NYSE: CBS), Goldcorp Inc. (NYSE: GG), American Electric Power Co. Inc. (NYSE: AEP), Burger King Worldwide Inc. (NYSE: BKW), Campbell Soup Co. (NYSE: CPB), J.M. Smucker Co. (NYSE: SJM), and Tower International Inc. (NYSE: TOWR).

Some standouts from today include the following stocks:

H.J. Heinz Co.(NYSE: HNZ) is up 19.7% at $72.39 after posting a new 52-week high of $72.61 earlier today. The food products maker is being acquired by Berkshire Hathaway Inc. (NYSE: BRK-A) and a private equity firm for $28 billion. More coverage here.

CenturyLink Inc. (NYSE: CTL) is down 22.6% at $32.26 after posting a new 52-week low of $32.05 earlier today. The communications company cut its dividend after a poor quarter. More coverage here.

Angie’s List Inc. (NASDAQ: ANGI) is up 24.6% at $16.97. The Internet firm soared on results and guidance. More coverage here.

Stay tuned for Friday. Cleveland Fed President Sandra Pianalto is giving a speech. We have also noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – Empire State manufacturing survey
• 9:00 a.m. – Treasury International Capital (TIC) data
• 9:15 a.m. – Industrial production
• 9:55 a.m. – University of Michigan/Thomson Reuters consumer sentiment index
• 10:00 a.m. – E-commerce retail sales

The adjusted earnings per share (EPS) loss for the quarter was just $0.19, compared with an estimate for a loss of $0.55. Revenues of $1.56 billion were slightly better than the consensus estimate of $1.55 billion.

Investors are taking hope from the company’s statement that it expects to benefit from an “eventual recovery” in the global market for metallurgical coal. And production costs are forecast to fall to an annual range of $71 to $75 per ton for eastern U.S. coal from an average of $75.84 a ton in the fourth quarter of 2012. In the fourth quarter of 2011, average costs were $81.21, but the company has closed several mines in the past year that contributed to the company’s falling costs.

When Peabody Energy Corp. (NYSE: BTU) reported earnings a couple of weeks ago, its poor showing dragged all the bigger coal stocks down. Same thing happened when Arch Coal Inc. (NYSE: ACI) reported earnings a few days later. Consol Energy Inc. (NYSE: CNX), James River Coal Co. (NASDAQ: JRCC), Walter Energy Inc. (NYSE: WLT) and Cloud Peak Energy Inc. (NYSE: CLD) tagged along for the most part.

This morning, Alpha’s shares are up about 13.7% at $9.65 in a 52-week range of $5.28 to $21.19. Shares of Peabody are up 2.8%, Consol’s shares are up 1.6%, Arch Coal is up 4.1%, Walter Energy shares are up 2.2%, James River is up 6.8% and Cloud Peak is down 0.4%, probably because when the company reported earnings last night they did not quite live up to expectations.

Coal stocks are almost like solar stocks these days. Each reacts to good or bad news about a competitor in the same way they would react if the news was just about itself. If there is money to be made in the sector it is on volatility, not on holding for the long term. In any but the shortest term, coal’s place as a fuel for electricity generation in the United States is on a continual downtrend and should remain there over the long haul.

The U.S. dollar index rose 0.01% today, now at 80.115. The GSCI commodity index is up 0.2% at 678.90, with commodities prices mixed today. WTI crude oil closed down 0.5% today, at $97.01 a barrel after the U.S. EIA released its weekly inventory report (more coverage here). Brent crude trades up 0.1% at $117.90 a barrel. Natural gas is up 2.4% today at about $3.31 per million BTUs. Gold settled down 0.3% today at $1,645.10 an ounce, its lowest settlement since August.

The unofficial closing bells put the DJIA down about 36 points to 13,982.60 (-0.26%), the NASDAQ rose more than 10 points (0.33%) to 3,196.88, and the S&P 500 rose 0.06% or less than 1 point to 1,520.32.

There were a several analyst upgrades and downgrades today, including Clearwire Corp. (NASDAQ: CLWR) cut to ‘underperform’ at Raymond James; General Electric Co. (NYSE: GE) reiterated as ‘outperform’ and price target raised to $25 at Credit Suisse; Groupon Inc. (NASDAQ: GRPN) raised to ‘buy’ at Sterne Agee; Cliffs Natural Resources Inc. (NYSE: CLF) cut to ‘hold’ at Deutsche Bank; and Philip Morris International Inc. (NYSE: PM) raised to ‘neutral’ at Nomura.

Earnings reports since markets closed last night resulted in several price moves today, including these: Bankrate Inc. (NYSE: RATE) is down 16.9% at $10.29 after posting a new 52-week low of $9.90 earlier today (more coverage here); Buffalo Wild Wings Inc. (NASDAQ: BWLD) is down 5.7% at $76.44; Clearwire Corp. (NASDAQ: CLWR) is down 0.2% at $3.18 (more coverage here); Rackspace Hosting Inc. (NYSE: RAX) is down 20.1% at $59.91; Comcast Corp. (NASDAQ: CMCSA) is up 2.4% at $39.91 after posting a new 52-week high of $42.00 earlier today (more coverage here); Dean Foods Inc. (NYSE: DF) is down 8.9% at $16.75 (more coverage here); Deere & Co. (NYSE: DE) is down 3.3% at $90.88 (more coverage here); and Total SA (NYSE: TOT) is up 1% at $51.93 (more coverage here).

After markets close today and before they open tomorrow morning we are scheduled to hear from Applied Materials Inc. (NASDAQ: AMAT), Avis Budget Group Inc. (NASDAQ: CAR), CenturyLink Inc. (NYSE: CTL), Cisco Systems Inc. (NASDAQ: CSCO), Cloud Peak Energy Inc. (NYSE: CLD), Intrepid Potash Inc. (NYSE: IPI), Kinross Gold Corp. (NYSE: KGC), Metlife Inc. (NYSE: MET), NetApp Inc. (NASDAQ: NTAP), Pioneer Natural Resources Co. (NYSE: PXD), TripAdvisor Inc. (NASDAQ: TRIP), Zillow Inc. (NASDAQ: Z), Alpha Natural Resources Inc. (NYSE: ANR), Barrick Gold Corp. (NYSE: ABX), DirecTV (NASDAQ: DTV), and PepsiCo Inc. (NYSE: PEP).

Some standouts from today include the following stocks:

Real Goods Solar Inc. (NASDAQ: RSOL) is up 58.9% at $2.40 after posting a new 52-week high of $2.83 earlier today. The solar installer has been selected by an unnamed homebuilder to install residential solar systems at new communities in California.

BlackBerry (NASDAQ: BBRY) is down 8.1% at $13.97. The smartphone maker said today that it would not release a low-cost phone this year.

Peregrine Pharmaceuticals Inc. (NASDAQ: PPHM) is down 18.5% at $1.72. The biopharmaceuticals maker announced “modest” results from a Phase II trial of its pancreatic cancer treatment.

Stay tuned for Thursday. Fed Governor Daniel Tarullo and St. Louis Fed President James Bullard are giving speeches. We have also noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – New claims for unemployment benefits
• 10:30 a.m. – EIA weekly natural gas storage report
• 1:00 p.m. – 30-year bond auction
• 4:30 p.m. – Fed balance sheet and money supply

And when one coal miner coughs, they all catch a cold. Peabody Energy Corp. (NYSE: BTU) dragged the sector down last week when it reported quarterly results, and Arch’s results are having the same effect. Peabody’s shares are down about 2.5% today, Consol Energy Inc. (NYSE: CNX) is seeing its shares down about 0.3%, and Alpha Natural Resources Inc. (NYSE: ANR) is down more than 2%. James River Coal Co. (NASDAQ: JRCC) is up about 0.7%, while Walter Energy Inc. (NYSE: WLT) is down about 2.3% and Cloud Peak Energy Inc. (NYSE: CLD) is down fractionally.

Demand for Arch’s thermal coal has fallen off the table as mild weather and cheap natural gas continue to throttle demand. The company now expects volume shipments of about 141 million tons in 2013, down from 155 million tons in 2012. Production at Consol has dropped from 62 million tons in 2011 to an estimated 55.5 million to 57.5 million tons for 2013. That’s one reason Consol is putting more effort and investment into its natural gas assets.

Like Peabody, Arch said today that it is “seeing signs” of a possible recovery in the domestic coal market in the second half of 2013. Those signs will evaporate unless natural gas prices move closer to $4 per million BTUs. Today’s price is about $3.34 per million BTUs, and the outlook for the first half of 2013 does not indicate an average price above $4.

After a good night’s sleep, investors have bid the stock down about 4.5% today and the drop has taken the other coal miners along for the ride. Alpha Natural Resources Inc. (NYSE: ANR) is down about 2.9% today, Arch Coal Inc. (NYSE: ACI) is down 3.8%, Consol Energy Inc. (NYSE: CNX) about 1%, James River Coal Co. (NASDAQ: JRCC) is down about 4.4%, Walter Energy Inc. (NYSE: WLT) about 1.8%, and Cloud Peak Energy Inc. (NYSE: CLD) is down 2.2%.

Peabody forecast higher costs in Australian operations and lower sales and pricing in the U.S. in the first quarter. The company sold 248.5 million tons of coal last year, near the high end of its 2013 forecast of 230 to 250 million tons. Peabody expects U.S. coal shipments to rise as natural gas costs rise and power plants switch back to coal-fired generation. The problem with that conclusion is that natural gas prices have been falling again.

Consol Energy said earlier this month that it would change the focus of its capital investments to natural gas production and will invest twice as much in gas as it will in coal. That news also dragged down coal stocks. Try as it might, the coal sector is still having trouble finding the silver lining.

The company’s CEO said:

[O]nce we complete the BMX Mine, we do not expect to be investing in new major coal growth projects. So, in 2014 and beyond, we expect annual coal investments to approach maintenance-of-production levels of $5 to $6 per ton.

The BMX (Bailey Mine Expansion) in southwestern Pennsylvania is expected to be operational by the first quarter of next year following a $660+ million expansion project that will boost production at the Bailey complex to 25 million tons a year.

To reach its spending goal, Consol plans to sell $455 to $640 million in assets, including a $328 million payment from Noble Energy Inc. (NYSE: NBL). The payment is the last in a $1 billion deal between the two firms to create a joint partnership to develop natural gas leases in the Marcellus shale play in southwest Pennsylvania and northwest Virginia.

Consol expects to invest $600 million to develop its Marcellus shale assets in 2013, another $160 million to maintain current natural gas production, and another $122 million in a joint venture with Hess Corp. (NYSE: HES) in the Utica shale play. Investment in natural gas development is expected to total $835 to $935 million.

Net investment in coal operations is forecast at $410 to $520 million, including a $205 million operating lease deal.

The news that a traditional coal company is investing twice as much in natural gas as in coal has pushed down the stocks of most other coal miners. Shares of Peabody Energy Corp. (NYSE: BTU) are down 2.9%, Arch Coal shares are down 2.2%, and Alpha Natural Resources Inc.’s (NYSE: ANR) are down 3.1%, while James River Coal Co. (NASDAQ: JRCC) is down 2.9%, Walter Energy Inc. (NYSE: WLT) is down 2.2%. Cloud Peak Energy Inc. (NYSE: CLD) is up about 1.1% and Consol itself is down 0.8%.

Alpha Natural Resources Inc. (NYSE: ANR) is up 4.4%, Walter Energy Inc. (NYSE: WLT) is up 3.6%, Arch Coal Inc. (NYSE: ACI) is up 1.9%, James River Coal Co. (NASDAQ: JRCC) is up 0.3%. Cloud Peak Energy Co. (NYSE: CLD) is today’s only loser, down 1.4%.

In its announcement today, Peabody’s CEO said:

We are seeing increased U.S. gas-to-coal switching given higher natural gas prices, and global seaborne coal markets are showing signs of improving next year. While the first quarter is challenged due to a combination of factors, we expect quarter-over-quarter improvement throughout the remainder of the year.

There’s the reason for investors enthusiasm today. Peabody thinks coal is coming back as a fuel source for electricity generation. That’s good news for coal miners — if it’s true, but inventories are still high, idled capacity can be brought back online quickly, regulation is getting tighter, and export demand may continue weak.

Peabody also said it would slash 2013 capital spending by half from 2012 levels. The company expects U.S. sales volumes will be somewhat lower next year, but Australian volumes are expected to be higher. There are a lot of moving parts in the coal industry, and a glitch in any one could bring the industry back down again.

Paul Ausick

In its announcement the company said:

It is CP’s intention to defer indefinitely plans to extend its rail network into the PRB coal mines based on continued deterioration in the market for domestic thermal coal, including a sharp deterioration in 2012.

That pretty much says it all for the market for thermal coal in the United States. The larger PRB miners like Arch Coal Inc. (NYSE: ACI), Alpha Natural Resources Inc. (NYSE: ANR), Cloud Peak Energy Corp. (NYSE: CLD) and Peabody Energy Corp. (NYSE: BTU) have been trimming production as coal prices remain low.

Canadian Pacific is just acknowledging the fact that a turnaround may not be imminent. Building a 260-mile extension to its existing network simply makes no economic sense.

Since Canadian Pacific has come under the control of William Ackman and his Pershing Square Capital Management, the company’s share price has jumped nearly a third and posted an all-time high of $94.83 in early November.

Shares of CP are inactive in premarket trading this morning, having closed on Friday at $93.34 in a 52-week range of $60.79 to $94.83.

Paul Ausick

The company’s CEO said:

Peabody remains focused on significant cost containment and capital discipline activities and expects to realize the benefit of these programs over the next year. While the global coal environment remains challenged, there are indications that markets are stabilizing through U.S. gas-to-coal switching, higher European coal-fueled generation and increased China infrastructure spending.

The company forecast adjusted diluted EPS for the full 2012 fiscal year of $2.10 to $2.30, including a net tax benefit of $0.22 that Peabody recorded in its second quarter. Excluding that one-time item, the range is $1.88 to $2.08. The consensus estimate called for EPS of $1.79

Peabody’s gross margins per ton improved in the U.S. but fell in Australia. At its Midwestern mines, gross margins rose from $13.95 in the third quarter of 2011 to $14.84 this year. In the West, margins rose from $5.01 to $5.54. In Australia, margins fell from $40.25 to $26.08.

Peabody expects demand for seaborne thermal coal to grow by 100 million metric tons in 2012, “with continued increases in 2013,” and demand for metallurgical coal to rise by 10% to 15% in 2013, as global economic growth and Chinese demand increase.

The company also noted that demand for coal-fired electricity generation in the United States rose from the low 30% range in the second quarter to 39%. Peabody believes that the vast majority of the decline in U.S. coal demand is now in the past, and the company says that it expects “a rebound in U.S. coal demand in 2013 as higher natural gas prices increase Powder River Basin and Illinois Basin coal consumption.”

Peabody’s good showing today is likely to put some air under many of the other U.S. coal companies, especially those with assets in the West. That includes Arch Coal Inc. (NYSE: ACI) and Cloud Peak Energy Inc. (NYSE: CLD).

Peabody’s shares are up 6.7% in premarket trading this morning at $27.60, in a 52-week range is $18.78 to $47.81. Thomson Reuters had a consensus analyst price target of around $31.62 before today’s report.

Paul Ausick