Peabody slumps on 4Q loss, mixed outlook, and dividend cut
By the Associated Press
NEW YORK (AP) — Shares of Peabody Energy Corp. traded lower Tuesday after the coal miner took a large loss in the fourth quarter and slashed its dividend payments to preserve cash.
The company's stock declined 45 cents, or 6.7 percent, to $6.22 in afternoon trading.
The global economic picture also looked shaky Tuesday as heavy equipment maker Caterpillar gave a weak forecast because of falling prices for commodities from copper to crude oil. The U.S. government issued a weak durable goods report, suggesting businesses cut spending on some manufactured goods because of concerns about soft economies in Europe and Asia, sinking energy prices, and the stronger dollar.
Peabody lost $514.6 million, or $1.92 per share, in the fourth quarter. Excluding asset impairment costs and charges related to discontinued operations, the loss came to $1.21 per share. Its revenue fell 3 percent to $1.68 billion.
Zacks Investment Research says analysts had forecast a loss of 36 cents per share on $1.63 billion in revenue.
Peabody said it will pay a quarterly dividend of a quarter of 1 cent in February, down from 8.5 cents in November. In a press release, Chairman and CEO Gregory Boyce said the company is taking additional steps to maintain its liquidity. Boyce said he expects the coal market to improve in time.
Cowen and Co. analyst Daniel Scott said the dividend cut is "a prudent move amid uncertain coal markets," but said it was likely to hurt the company's share price. Scott said that Peabody is working hard to cut costs, but it is also facing lower revenue in the U.S. and mining yields in Australia that are a bit lower than he expected.
Scott maintained an "Outperform" rating on Peabody shares with a price target of $10.
For the full year, Peabody took a loss of $787 million, or $2.94 per share. Revenue fell 3 percent to $6.79 billion.
Looking ahead, the company expects to take a loss of 32 to 39 cents per share in the first quarter. Analysts surveyed by FactSet forecast a loss of 24 cents per share, on average.
Peabody shares have fallen 14 percent since the beginning of the year, while the Standard & Poor's 500 index has stayed nearly flat. The stock has declined 60 percent in the last 12 months.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on BTU at http://www.zacks.com/ap/BTU
Keywords: Peabody Energy, Earnings Report