Oct 22 Coal miner Peabody Energy Corp's
profit raced past analysts' estimates as cost cuts started to
pay off and sales volumes in Australia climbed on a pick-up in
demand from China, sending its shares up as much as 14 percent.
Record shipments in Australia offset rising production costs
during the third quarter, Peabody said. The company is looking
to fund projects that are nearing completion rather investing in
new ones, aiming at increasing volumes even as prices fall.
"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," Chief Executive
Gregory Boyce said.
Low prices, weak demand and high-cost Australian operations
have forced coal producers to cut costs this year. Prices have
fallen about 20 percent in the first half of this year.
Peabody shut a mine in Indiana last month, joining companies
such as Alpha Natural Resources Inc, Walter Energy Inc
and Consol Energy Inc in cutting production.
Peabody said on Monday it would save about $100 million
primarily through workforce reductions.
The company raised the lower-end of its full-year sales
forecast by 10 million tons. Total sales for 2012 are expected
to be between 240 million and 250 million tons.
Australian shipments rose 39 percent to 8.5 million tons
during the quarter. The company is targeting Australian sales of
between 31 million and 33 million tons in 2012. It had sales of
25 million tons in 2011.
Peabody expects full-year adjusted profit of $2.10 to $2.30
per share. Analysts on average were expecting earnings of $1.78
per share, according to Thomson Reuters I/B/E/S.
Income from continuing operations fell to $122.9 million, or
46 cents per share, from $291.2 million, or $1.04 per share.
Adjusted profit was 51 cents per share, much higher than
analysts expectations of 33 cents.
Revenue rose 6 percent to $2.1 billion, topping average
analysts' expectation of $1.97 billion.
Shares of the company were up 12 percent at $29.13 on Monday
on the New York Stock Exchange.