* Sees Q1 adj loss $0.04/shr to $0.26/ shr vs est. $0.09/shr
* Q4 adj. EPS $0.36 vs est. $0.25
* Q4 revenue down 10 pct to $2.02 bln
* Shares rise as much as 8 pct to 3-week high
By Swetha Gopinath
Jan 29 Coal miner Peabody Energy Corp
said it will lower its exposure to the United States to focus on
Australia, where higher prices for steel-making coal and lower
production costs are expected to lift its earnings later this
Shares of the world's top private-sector coal miner rose 8
percent to a three-week high of $27.20 on Tuesday after the
company posted a better-than-expected profit for the fourth
"We enter 2013 with a highly contracted U.S. portfolio and
growing Australian volumes as we position the company to benefit
when markets recover," Chief Executive Gregory Boyce said in a
Peabody's acquisition of Macarthur Coal in late 2011 for
nearly $5 billion helped the U.S. company expand its presence in
Australia, the largest exporter of steel-making coal that sells
mostly to energy-hungry Asian countries.
Australian mining accounted for about 43 percent of
Peabody's $8.07 billion revenue in 2012, helping the company
offset weakness in the United States, where coal is being
increasingly replaced by cheaper natural gas for power
Given the long-term demand for coal in Asia, Peabody is also
keen on getting a foothold in Mongolia, the largest steel-making
coal exporter to China.
The company's agreement to invest in the western block of
the Tavan Tolgoi coal project in Mongolia was shelved in 2011
after being branded unfair by Japanese and South Korean rivals.
Many Mongolian lawmakers have also asked the government to
pass legislation to limit foreign ownership of mineral deposits.
"We're still involved in discussions with the government as
they begin to look at their mining laws to try to come up with a
framework that makes sense on a go forward basis," Boyce said in
a conference call.
A planned $3 billion initial public offering of the
7.5-billion tonne-Tavan Tolgoi coal project will not go ahead
this year as originally scheduled, the chief executive of the
company in charge of the deposit said last week.
Peabody forecast an adjusted loss of between 4 cents and 26
cents per share in the first quarter, against analysts'
estimates of a loss of 9 cents.
The company said it expects earnings to rise as the year
progresses due to its expectation of an increase in Australian
volumes and pricing, as well as lower costs.
Thermal coal prices, however, remain weak, and Peabody
expects U.S. revenue per-ton to fall between 5 percent and 10
percent from 2012 levels.
Benchmark thermal-coal price declined about 3
percent to close at $87.15 in the three months ended Dec. 31.
Met coal prices, on the other hand, are expected to bounce
back this year on strengthening steel prices in China.
Peabody is targeting coal sales of between 230 million and
250 million tons for the year, compared with 248.5 million tons
The company reported a loss of $1 billion, or $3.78 per
share, in the fourth quarter, as it took $884 million in charges
related to writing down the value of some properties.
Excluding items, profit was 36 cents per share, well ahead
of analysts expectations of 25 cents per share, according to
Thomson Reuters I/B/E/S.
"Q4 was a nice beat versus our estimates, driven by a strong
performance of Peabody's Australian platform, where both
realized prices and costs per ton came in better than we had
expected," said analyst Lucas Pipes of Brean Murray & Carret.
Revenue fell about 10 percent to $2.02 billion.
Shares of the company, valued at $6.75 billion, have fallen
35 percent since touching a year-high of $38.96 in February to
Shares of other coal miners Arch Coal Inc and Alpha
Natural Resources Inc also rose on Tuesday.