Peabody Energy Beats Expectations But Takes A Step Back Anyway

Peabody Energy (NYSE: BTU  ) reported earnings on July 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Peabody Energy missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue dropped. GAAP earnings per share contracted significantly.

Margins shrank across the board.

Revenue details
Peabody Energy chalked up revenue of $1.73 billion. The 10 analysts polled by S&P Capital IQ predicted revenue of $1.81 billion on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $1.96 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.33. The 19 earnings estimates compiled by S&P Capital IQ forecast -$0.06 per share. GAAP EPS of $0.33 for Q2 were 56% lower than the prior-year quarter's $0.75 per share. (The prior-year quarter included -$0.03 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 16.7%, 950 basis points worse than the prior-year quarter. Operating margin was 1.2%, much worse than the prior-year quarter. Net margin was 5.2%, 520 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.83 billion. On the bottom line, the average EPS estimate is -$0.17.

Next year's average estimate for revenue is $7.32 billion. The average EPS estimate is -$0.25.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,973 members out of 2,064 rating the stock outperform, and 91 members rating it underperform. Among 320 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 302 give Peabody Energy a green thumbs-up, and 18 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Peabody Energy is outperform, with an average price target of $25.85.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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