Boston, MA 04/25/2014 (wallstreetpr) – Peabody Energy Corporation (NYSE:BTU) disappointed the street by posting the unexpected loss in the first quarter results. Peabody is the largest coal miner of the country. The loss was not at all on expected by the market. The share has not performed well in this year. It has declined about 11% in 2014. However, company is positive for the coming quarter.
The earnings per share
Getting back to last year Peabody Energy Corporation (NYSE:BTU) had posted a loss of $23.4 million. This quarter it surpassed the figure of last year and reported a huge loss of $48.5 million. It is a loss of 18 cents a share. The year before it was five cents a share. If one-time items are excluded then the loss widens to 19 cents a share. The analysts expected Peabody Energy to post a profit of one cent a share in first quarter 2014. The sales came at $1.63 billion as compared to $1.75 billion in the first quarter of 2013. The adjusted EBITDA came at $177 million.
Drop in coal prices
The huge drop came in Peabody Energy Corporation (NYSE:BTU)’s Australian revenue per ton which fell by 17%. The drop was the result of lower prices of metallurgical coal. The deal contract was made at a price of $120 per metric ton. It is the lowest price of metallurgical coal since 2007. Metallurgical Coal is used by steel makers to reduce iron ore.
Supply Overhang
It is not that the demand of coal was low. There was an increase in coal demand. There was a 7% increase in sales volume. The coal sales were 61.3 million tons of coal in the first quarter. The company witnessed demand coming back in the U.S. market. But the problem came from the extended supply of coal. It overshadowed the benefits of increased demand and led to a decline in coal prices.
