ST. LOUIS (AP) — Coal miner Peabody Energy Corp. reported a loss for the third quarter on weaker prices for coal used to make steel. Wall Street still embraced the results and sent shares of the belt-tightening company higher.
The world's biggest private-sector coal company said Thursday that its loss attributable to common shareholders was $26.1 million, or 10 cents per share, for the July-through-September period compared with net income of $42.9 million, or 16 cents per share, a year ago.
St. Louis-based Peabody's revenue fell 13 percent to $1.80 billion from $2.06 billion.
Adjusted income from continuing operations was 5 cents per share, down 48 cents from a year ago. Analysts polled by FactSet expected a loss of 3 cents per share on revenue of $1.79 billion.
Stern Agee analyst Michael Dudas and Cowen & Co.'s Daniel Scott, in separate research notes to clients, called Peabody's latest showing "impressive," and the company's shares rose $1.50, or 8.4 percent, to $19.39 in Thursday morning trading.
Peabody says it expects adjusted diluted earnings per share of 27 to 45 cents for the year, excluding any impact of the tentative settlement announced last week with bankrupt spinoff Patriot Coal Corp. and the United Mine Workers of America.
As part of that deal, pending approval next month by a St. Louis judge overseeing Patriot's quest to emerge from Chapter 11 bankruptcy, Peabody will spend $310 million over four years to fund retiree health care benefits and provide about $140 million in letters of credit to Patriot, which Peabody spun off in 2007.
That settlement resolves a festering dispute between the St. Louis-based companies that intensified after Patriot filed for bankruptcy last year. U.S. Bankruptcy Judge Kathy Surratt-States ruled in May that Peabody was not obligated to continue health care benefits for some 3,100 retirees, only to be reversed in August by an 8th U.S. Court of Appeals bankruptcy panel.
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