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Peabody Energy reports strong financials despite weak net income

AInvestThursday, Feb 8, 2024 1:30 pm ET
2min read

Leaping into the fiscal jungle with the precision of a jaguar, Peabody Energy Corporation, a titan in global coal production and marketing, unfolded its financial narrative for the fourth quarter and the calendar year wrapped up on December 31, 2023. The narrative, however, was tinged with a decrease in net income for both timelines, showcasing a Q4 net income of $192.0 million, or $1.33 per diluted share, a descent from the previous year's $632.0 million, or $3.92 per diluted share.

The annual financial saga saw a similar trend with net income tapering to $759.6 million, or $5.00 per diluted share, from a more robust $1,297.1 million, or $8.31 per diluted share in the yesteryears. Despite the dip in net income, the company's revenue narrative for the year spun a tale of stability at $4,946.7 million, marginally receding from the prior year's $4,981.9 million. The Adjusted EBITDA for the year also saw a retreat to $1,363.9 million from the preceding year's $1,844.7 million.

Jim Grech, the helmsman and President and CEO of Peabody, credited the 2023 performance to the team's unwavering commitment, a diverse asset portfolio, and strategic prowess. The company's allegiance to enriching shareholder wealth was manifest in its repurchase of over 11 percent of its shares outstanding in 2023. The company also spotlighted operational milestones, notably the early commencement of new longwall production at Shoal Creek and the highest quarterly sales volume from the Powder River Basin (PRB) segment since the annals of 2019.

Financial and Operational Chronicles

The company's seaborne thermal segment unfurled Adjusted EBITDA margins of 35 percent and $99.8 million in Adjusted EBITDA, with 3.7 million tons dispatched. The seaborne metallurgical segment, not to be outdone, marked the year's highest quarterly sales volume with 2.1 million tons shipped at an enviable average realized price of $186.74 per ton, weaving together Adjusted EBITDA of $166.2 million and 42 percent margins. The PRB segment, too, shone brightly, shipping 23.6 million tons at an average realized price of $13.58 per ton, culminating in Adjusted EBITDA of $37.6 million.

The shareholder return saga remained vigorous, with $470.7 million dedicated to enriching shareholder coffers in 2023. The company spun $283.6 million in operating cash flow from continuing operations and committed $157.9 million in capital expenditures in the fourth quarter. The Available Free Cash Flow (AFCF) for the year ended 2023 was a commendable $724.1 million.

Looking into the crystal ball for the first quarter of 2024, Peabody anticipates volumes of 3.9 million tons for seaborne thermal, 1.4 million tons for seaborne metallurgical, and roughly 21 million tons for U.S. thermal from the PRB segment. The costs per ton are expected to nestle within specific ranges for each segment, with aspirations to harness a significant slice of the premium hard coking coal price index for the seaborne metallurgical segment.

Peabody Energy Corporation, steadfast in its role as a coal industry stalwart, continues to fuel essential energy and steel production products. With strategic foresight, operational agility, and a deep commitment to shareholder value, the company is geared to navigate the intricate weave of market dynamics and regulatory landscapes.

$BTU(BTU)

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