Why Peabody Energy fell on July 22
Peabody Energy provided guidance for the second quarter in its first quarter earnings published on April 24, 2014. The company expected adjusted earnings before interest, taxes, depreciation, and amortization (or EBITDA) for the second quarter to be in the range of $140–$200 million and net losses of $33–$104 million. The guidance expected loss per share to be in the range of $0.14–$0.39.
Wall Street analysts’ consensus estimate for loss per share was $0.289. Wall Street analysts’ estimated revenues of $1.634 billion and net losses of $71.1 million. The company has surpassed analyst estimates for revenues for the second quarter due to improved volumes. The company has also surpassed its own EBITDA estimates for the quarter clocking an EBITDA of $231.1 million. The company has reported lower losses per share than analysts’ estimates.
Peabody’s (BTU) stock fell 1.9% on July 22 when it was released, despite positive surprises as the company painted a grim picture for the third quarter in its guidance. On the same day, the S&P 500 (SPY) was marginally up by 0.3%. Peabody’s competitor, Alpha Natural Resources (ANR) was up 2.8% after falling 2.1% the previous day. Arch Coal (ACI) and Cloud Peak Energy (CLD) traded almost flat.
To learn more about the company’s guidance for the third quarter and Market Realist’s take on what lies ahead for the company, continue reading the next section in this series.