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Peabody Q4 2023: Missed Analyst Estimates, Lower Earnings, But Strong Guidance for 2024

Peabody Energy reported mixed results for Q4 2023, missing analyst expectations for both net income and revenues. Earnings were down significantly compared to the prior year due to decreased volumes and higher costs. However, the company provided strong guidance for 2024, highlighting optimism in the market and future growth plans.

Key Q4 2023 highlights:

  • Net income: $1.33/share, below analyst estimates ($1.34 – $1.44) and significantly lower than $3.92/share in Q4 2022.
  • Revenues: $1.24 billion, down 24% YoY.
  • Adjusted EBITDA: $345.1 million, down 31% YoY.
  • Seaborne thermal: Lower volumes due to train derailment, higher costs.
  • Seaborne metallurgical: Higher volumes, lower costs.
  • Powder River Basin: Highest quarterly volume in four years, increased costs.
  • Other US thermal: Lower sales due to longwall move and low demand.
  • 2024 guidance: Strong expectations for all segments, increased CAPEX.

Key questions for management:

  • Shareholder return: What are expectations for share repurchases and dividends in 2024?
  • PRB costs: Can you elaborate on cost increases and concerns about labor retention?
  • Seaborne metallurgical: How are you managing the Warrior River lock outage and what is the expected annual production at Shoal Creek?
  • Centurion: Can you provide updates on longwall installation and development coal production?
  • Guidance:
    • Seaborne thermal: More details on export expectations and pricing strategy.
    • Seaborne metallurgical: Insights on sales expectations by operation.
    • PRB: Clarification on unpriced/committed sales, export potential for NARM coal, and carryover from 2023.
    • Other US thermal: Breakdown of expected volume decline.

Overall, Peabody’s Q4 results were mixed, but the strong 2024 guidance suggests confidence in the market and future growth. Addressing the key questions above will provide further clarity and market insight.