Peabody Offers Comments on Q1 Outlook
Peabody Energy (NYSE: BTU) today provided comments on factors affecting first quarter and selected full year 2013 targets, following initial first quarter seaborne metallurgical coal pricing settlements.
Compared with average quarterly year-to-date 2012 levels, first quarter 2013 results are expected to be impacted by:
o An increase in Australian unit costs of approximately 10 percent. Several factors will affect first quarter targets, including the timing of additional overburden removal at the Eaglefield and Wilpinjong mines that impacts both production and costs; startup costs associated with the transition to owner-operator status at the Wilpinjong and Millennium mines; and a larger proportion of higher-cost metallurgical coal; o Lower realized metallurgical coal pricing compared with the fourth quarter of 2012; o A decline of approximately 2 million tons in U.S. sales based on market-related demand, as well as a decrease of approximately 5 percent in average realized pricing due to the expiration of higher-priced contracts; and o Higher depreciation, depletion and amortization expenses as recently completed capital projects fully begin operations and production increases from higher-cost reserves acquired in recent years.
The company expects the first quarter to mark trough earnings, with results expected to increase as the year proceeds based on improving Australian production and margins.
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