Peabody Energy Corporation (OTC:BTU) announced its fourth-quarter results before the market opened today. The company announced a loss from continuing operations of $1.52 per share. However, after backing out asset impairment and settlement charges related to a bankruptcy settlement, the company's adjusted earnings came in at breakeven.
Peabody Energy recorded $506.8 million in asset impairment charges on the quarter. In addition to these charges, the company also recorded a $30.6 million charge related to its settlement with Patriot Coal and the Unified Mine Workers of America. However, even without these charges, the company didn't earn a profit on the quarter.
While the company sold 64.6 million tons of coal in the quarter, falling coal prices led to it only producing $1.74 billion in sales. Looking back at the previous year's fourth quarter, it sold 63.3 million tons of coal and produced $2.02 billion in sales.
Peabody Energy could have done far worse than simply break even on the quarter. The company was able to avoid this fate by shaving $96.2 million in operating costs and expenses over the previous fourth quarter despite higher volumes. These cost savings, which totaled $340 million in 2013, enabled it to produce positive cash flow even as coal prices slumped.
Looking ahead, Peabody Energy plans to continue to modestly grow its coal volumes while also targeting more cost improvements. That should put it in the position to succeed once market conditions for coal improve.