Shanghai Shibang
Machinery Co., ltd.
HOUSTON - Coal miner Peabody Energy Corp, which has cut production because of a drop in demand, said on Tuesday that second-quarter profit fell sharply as weak market conditions persisted.
Peabody's results have been severely crimped by a sharp drop in global steel production, which has forced cuts in production of steel-making metallurgical, or coking, coal.
In addition, global electricity demand is expected to decline in 2009. Peabody's thermal, or steam, coal fuels about 10% of America's electricity generation.
The coal company's shares fell 2,4% to $33,98 on the New York Stock Exchange.
Net earnings were $79-million, or 29c per share, compared with $233-million, or 85c per share, a year earlier, the St. Louis-based company said.
Income from continuing operations, excluding a tax-related expense, was 49c per share, matching the average Wall Street estimate, according to Reuters Estimates.
Revenue fell to $1,34-billion from $1,53-billion a year earlier. Analysts had expected revenue of $1,44-billion.
Peabody is sticking to its lowered 2009 production estimates of 185-million to 190-million tons in the US and 20-million to 23-million tons in Australia.
Supply and demand fundamentals for the US market remain out of balance, with coal generation off more than 9% year to date due to reduced economic activity, a reduction in cooling degree days so far this summer, and greater nuclear, natural gas and hydro generation, Peabody said.
Peabody now projects that demand for US coal is likely to be 115-million to 125-million tons below 2008 levels.