Following Q3 Results, Peabody Energy Warns Its Business Might Not Be Sustainable

In the latest sign that Old Energy’s days might be numbered, coal giant Peabody Energy (NYSE:BTU) has warned that its business might not be viable for much longer. The admission came in a regulatory filing that mirrored Monday’s release of the company’s results for Q3 of fiscal 2020.

For the quarter, Peabody’s revenue landed at $671 million, a steep 39% year-over-year decline. That was on the back of a 23% decline in the volume of tons sold. The top-line figure missed the consensus analyst estimate, albeit slightly. The decline was attributable “to lower volumes, mix changes, and weaker seaborne pricing,” the company wrote in its official earnings release.

A hard hat among lumps of coal.

Image source: Getty Images.

On the bottom line, Peabody managed to narrow its net loss, coming in at $67.1 million for Q3, or $0.66 per share, compared with the year-ago result of $82.8 million. For this most recent quarter, analysts were collectively estimating the company would book a steeper per-share loss of $0.86.

However, at the end of the quarter the current portion of Peabody’s long-term debt stood at over $1.6 billion; combined with other obligations, this drove the company’s total current liabilities 143% higher to almost $2.4 billion.

Combined with the fact that as the world’s top private-sector coal producer, it’s out of step with the global trend toward greener energy inputs, its future in great doubt.

In its 10-Q regulatory filing, it admitted that the numerous risks with its financial performance, current energy market conditions, and that debt burden, among other negatives, “raise substantial doubt about whether the Company will meet its obligations as they become due.”

Investors heeded these words on Monday, trading the company down by almost 8% on a generally good day for the stock market.

 

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