How the Wheels Came Off Peabody Energy's Bus

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Peabody Energy (NYS: BTU) reported earnings on Jan. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Peabody Energy missed on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and earnings per share expanded.

Gross margins increased, operating margins grew, and net margins dropped.

Revenue details
Peabody Energy reported revenue of $2.3 billion. The 12 analysts polled by S&P Capital IQ anticipated revenue of $2.4 billion. Sales were 24% higher than the prior-year quarter's $1.8 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.72. The 20 earnings estimates compiled by S&P Capital IQ anticipated $1.32 per share on the same basis. GAAP EPS of $0.82 for Q4 were 5.0% higher than the prior-year quarter's $0.78 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 31.7%, 400 basis points better than the prior-year quarter. Operating margin was 20.4%, 370 basis points better than the prior-year quarter. Net margin was 9.9%, 160 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.4 billion. On the bottom line, the average EPS estimate is $1.16.

Next year's average estimate for revenue is $9.5 billion. The average EPS estimate is $4.77.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 1,909 members out of 1,988 rating the stock outperform, and 79 members rating it underperform. Among 434 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 416 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 $58.64.

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At the time this article was published 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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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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