Deutsche Bank Gives 3Q Preview Of Peabody Energy

Deutsche Bank expects Peabody

to report a 3Q EPS of $0.97 compared to a Street estimate of $0.91. Prior comparable results are EPS of $0.71 in 2Q10 and $0.49 in 3Q09. EBITDA forecast for 3Q is $542MM; vs $422MM in 2Q10 and $338MM in 3Q09. Peabody's guidance pointed to 3Q EBITDA of $475 to $550MM and EPS of $0.75 to $1.00 with the sequential improvement attributed to higher shipments and prices. Key questions in the quarter include expansion progress, met coal outlook & impacts from China slowing steel output, cost pressures including in Australia via rising A$, and update on US export potential. Deutsche Bank expects revenue/ton to increase to $29.92, as well as costs rising with cash operating expenses to average $21.48/ton in 3Q10 versus $20.77/ton in 2Q10 and $20.94/ton in 3Q09. Net-net, Deutsche Bank expects EBITDA/t to increase to $8.44/ t vs $7.06/t in 2Q10 and $5.31/t in 3Q09. BTU closed Tuesday at $50.84