UPDATE 4-Peabody misses estimates, cuts coal production

* Earnings jump threefold; revenue up 15 percent

* Results miss Wall Street expectations

* Big drop in Australian shipments

* Stock down 12 pct; other coal shares drop (Adds CEO comments, stock activity)

By Steve James

NEW YORK, April 15 (Reuters) - Coal miner Peabody Energy Corp (BTU.N) said on Wednesday that it would cut more production because of weak demand, and its stock dropped 12 percent after first-quarter profit fell far short of Wall Street estimates.

The results were severely affected by a 23 percent drop in global steel production, which brought a sharp reduction in production of steel-making metallurgical, or coking, coal in Australia, the company said.

In addition, it said global electricity demand was on pace to decline 1 percent to 2 percent in 2009. Peabody's thermal, or steam, coal fuels about 10 percent of America's electricity generation.

Depressed coal prices are putting pressure on many of Peabody's competitors, Chief Executive Greg Boyce told analysts on a conference call.

Boyce said the industry still needed to cut more production to rebalance supply and demand, and Peabody has cut 15 million tons since the first of the year.

"Our assumption is you will see more (cuts), and they will accelerate over the near-term," said Boyce.

U.S. coal demand could fall by 70 million to 90 million tons in 2009 because of the economic downturn, reduced exports and low natural gas prices, Peabody said. The United States produces about 1.1 billion tons per year.

Peabody stock fell $3.62 to $25.72 in afternoon New York Stock Exchange trading. The company's results dragged on the sector, with Arch Coal (ACI.N) down 5.9 percent, Massey Energy (MEE.N) 6.8 percent lower and Consol Energy (CNX.N) sliding 3.2 percent.

During the first quarter, coal prices dropped dramatically. The price of a ton of eastern U.S. steam coal that was $61.50 on Jan. 1 slumped 25 percent to $45.63 on March 31, according to industry newsletter Coal & Energy Price Report.

Peabody said first-quarter net earnings rose to $170 million, or 63 cents per share, from $57 million, or 21 cents per share, a year earlier.

Income from continuing operations was 50 cents per share, far below the average forecast of 95 cents from analysts polled by Reuters Estimates.