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Peabody Energy’s Future Earnings: What the Company Expects

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Nov. 3 2017, Updated 7:30 a.m. ET

Peabody Energy’s 2017 guidance

After its 3Q17 earnings release, Peabody Energy (BTU) increased its 2017 US sales guidance to 151 million–158 million short tons, from 148 million–153 million short tons. It estimates a marginal rise in revenue per ton for sales from its US mining operations of $18.55–$18.75 compared to the latest reported value of $18.38.

Peabody also anticipates cost per ton of coal produced from its US mining operations to rise from $13.77 in the current quarter to $13.85–$14.25 in 2017. However, BTU expects the cost of production in Australian mining operations to remain constant.

Peabody has marginally revised its 2017 Australia and US sales guidance to 31 million–32 million short tons.

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Analysts’ expectations

After the company’s 3Q17 earnings results, analysts revised their future EBITDA (earnings before interest, tax, depreciation, and amortization) estimates for Peabody Energy. For the coming quarter, analysts anticipate a rise of 14% compared to their pre-3Q17 estimates. They also anticipate higher margins in 4Q17 as well as future quarters.

Outlook

Peabody Energy had an impressive third quarter. It witnessed strong mining performance and better metallurgical coal volumes and costs. The company intends to return cash to shareholders. The last quarter of the year looks upbeat, according to Wall Street analysts.

On March 28, 2017, President Donald Trump signed an order to repeal the moratorium on federal coal leases and some other environmental guidelines implemented by the Obama administration. The new climate change reforms of the Trump administration are expected to have a positive effect on coal (KOL) companies such as Peabody Energy (BTU), Cloud Peak Energy (CLD), Alpha Natural Resources (ANRZQ), and Arch Coal (ARCH).

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