UPDATE 1-Peabody's 4th-qtr earnings drop

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NEW YORK, Jan 31 (Reuters) - Peabody Energy Corp (BTU.N), the world's largest coal producer, on Thursday posted lower fourth-quarter earnings, hurt by the company's spin-off of its Patriot Coal Corp (PCX.N) unit.

Net income was $35.8 million, or 13 cents per share, compared with $175 million, or 65 cents per share, a year earlier.

Earnings from continuing operations were 71 cents per share, from 68 cent per share in the year-ago period.

Revenue rose 10 percent in the fourth quarter as the company sold more coal, offsetting lower prices at its Australia operations.

Peabody said it expects to earn $1.00 per share to $1.85 per share in 2008, with earnings before interest, taxes, depreciation and amortization (EBITDA) between $1.0 billion and $1.3 billion.

It also sees production of 220 million to 240 million tons, with sales of 240 million to 260 million tons in 2008.

For the first-quarter, it expects earnings between 5 cents per share and 25 cents per share. (Reporting by Lisa Lee, editing by Gerald E. McCormick)