Peabody Energy Q3 2026: Revenue Beats but EPS Loss Runs Deep

Peabody Energy reported third-quarter 2026 revenue of $1.10 billion, clearing the consensus estimate by about 7.5% and rising roughly 8% from the same period a year earlier. All four business segments posted positive adjusted EBITDA, a noteworthy operational achievement given the headwinds the company was navigating.

GAAP diluted EPS came in at negative $0.27, missing the consensus estimate of negative $0.03. Charges tied to a terminated acquisition, an induced conversion on the 2028 convertible notes, and debt discount amortization weighed on the per-share result, partially offset by fair value and mark-to-market gains.

The deepest operational problem in the quarter came from Centurion, the company's Australian metallurgical coal mine. Unexpected geological faulting late in the period cut October output to roughly 45,000 tons and elevated met segment costs to $162.45 per ton. Management has pushed the next longwall move to Q3 2027 and trimmed full-year metallurgical volumes by 0.6 million tons as a result. Centurion Q4 sales are now guided to just 0.3 to 0.5 million tons.

Seaborne Thermal provided a meaningful counterweight, with segment adjusted EBITDA climbing 26% sequentially to $65.5 million as export realized pricing rose to $100.37 per ton. The Seaborne Metallurgical segment returned to positive adjusted EBITDA of $5.2 million after realized pricing improved nearly $17 per ton quarter over quarter. CEO Jim Grech noted that seaborne operations benefited from higher pricing and that the company still reached its Q3 Centurion sales targets despite the faulted conditions.

Looking ahead, Peabody guided Q4 Seaborne Metallurgical volumes at 2.2 to 2.4 million tons, with Seaborne Thermal expected to ship 3.6 to 3.8 million tons. Capital expenditure guidance was cut by $40 million for the full year, including roughly $30 million at Centurion following the deferral of Northern panels development. The company also redeemed the remaining $39.9 million of its 2028 convertible notes in November 2026, reducing potential share dilution by 4 million shares.

Reported results have trended lower since late 2024, and Q3 2026 extends that pressure despite the top-line beat. Whether Centurion can clear its faulted zone quickly enough to support the promised Q4 free cash flow improvement is the key operational variable investors will be watching in the months ahead.