Peabody Energy Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Peabody Energy (NYSE:BTU) will unveil its latest earnings on Monday, October 22, 2012. Peabody Energy mines steam coal for sale mainly to electric utilities and metallurgical coal for sale to industrial customers.

Peabody Energy Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 34 cents per share, a decline of 60.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 65 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 35 cents during the last month. Analysts are projecting profit to rise by 56.6% compared to last year’s $1.81.

Past Earnings Performance: Last quarter, the company reported profit of 73 cents per share versus a mean estimate of net income of. The company has beaten estimates for the past three quarters.

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A Look Back: In the second quarter, profit fell 28.1% to $204.7 million (75 cents a share) from $284.8 million ($1.05 a share) the year earlier, but exceeded analyst expectations. Revenue fell 0.5% to $2 billion from $2.01 billion.

Stock Price Performance: Between August 20, 2012 and October 16, 2012, the stock price had risen $2.97 (12.9%), from $22.94 to $25.91. The stock price saw one of its best stretches over the last year between June 26, 2012 and July 3, 2012, when shares rose for six straight days, increasing 24.1% (+$5.09) over that span. It saw one of its worst periods between November 11, 2011 and November 25, 2011 when shares fell for 10 straight days, dropping 18.9% (-$7.65) over that span.

Wall St. Revenue Expectations: Analysts predict a decline of 3.4% in revenue from the year-earlier quarter to $1.97 billion.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 9.2% in the third quarter of the last fiscal year, 20.2% in the fourth quarter of the last fiscal year and 16.8%in the first quarter before dropping in the second quarter.

The company is trying to use this earnings announcement to rebound from income declines in the past two quarters. Net income dropped 2.2% in the first quarter and then again in the second quarter.

Analyst Ratings: With 14 analysts rating the stock a buy, two rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.48 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.86 in the first quarter to the last quarter driven in part by a decrease in current assets. Current assets decreased 15% to $2.57 billion while liabilities rose by 6.6% to $1.74 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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