PEABODY ENERGY CORPORATION FORM 10-Q" This is a quarterly report filed with the Securities and Exchange Commission (SEC) by Peabody Energy Corporation, a publicly traded company. The report provides financial information and other disclosures required by the SEC.
Peabody Energy Corporation’s quarterly report for the period ended March 31, 2025, shows a net loss of $1.4 billion, compared to a net loss of $1.1 billion in the same period last year. The company’s revenue decreased by 12% to $1.3 billion, primarily due to lower coal sales volumes and prices. The company’s operating expenses increased by 15% to $1.6 billion, mainly due to higher costs associated with coal production and sales. As of March 31, 2025, the company had cash and cash equivalents of $1.1 billion and a debt balance of $4.4 billion. The company’s stockholders’ equity decreased by 14% to $2.3 billion, primarily due to the net loss and a decrease in the fair value of its investments.
Overview of Peabody Energy Corporation
Peabody Energy Corporation is a leading producer of metallurgical and thermal coal, with operations in the United States and Australia. In 2024, the company produced and sold 118.1 million and 118.0 million tons of coal, respectively, from its continuing operations. As of March 31, 2025, Peabody owned interests in 17 active coal mining operations.
The company reports its results through five reportable segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal, and Corporate and Other. Peabody’s coal is sold through a mix of annual, multi-year, spot, and index-based contracts, with pricing influenced by factors such as coal quality, competition from alternative fuels, and global trade policies.
Financial Performance Highlights
For the three months ended March 31, 2025, Peabody reported the following key financial results:
Income from continuing operations, net of income taxes, decreased by $7.4 million compared to the same period in 2024, driven by lower revenue from weaker seaborne coal pricing and higher depreciation and amortization expenses. This was partially offset by lower operating costs and a lower tax provision.
Adjusted EBITDA, a non-GAAP measure used by management to evaluate segment performance, decreased by $16.5 million year-over-year.
The table below summarizes Peabody’s key financial and operating metrics by segment for the three-month periods ended March 31, 2025 and 2024:
| Metric | Seaborne Thermal | Seaborne Metallurgical | Powder River Basin | Other U.S. Thermal |
|---|---|---|---|---|
| Tons Sold (millions) | ||||
| Q1 2025 | 4.4 | 1.8 | 19.6 | 3.1 |
| Q1 2024 | 4.0 | 1.4 | 18.7 | 3.2 |
| Revenue per Ton | ||||
| Q1 2025 | $60.64 | $125.15 | $14.02 | $54.32 |
| Q1 2024 | $71.24 | $172.60 | $13.62 | $59.75 |
| Costs per Ton | ||||
| Q1 2025 | $41.37 | $117.66 | $12.18 | $43.71 |
| Q1 2024 | $47.71 | $138.83 | $12.74 | $45.25 |
| Adjusted EBITDA Margin per Ton | ||||
| Q1 2025 | $19.27 | $7.49 | $1.84 | $10.61 |
| Q1 2024 | $23.53 | $33.77 | $0.88 | $14.50 |
Revenue and Profit Trends
Seaborne Thermal Segment:
- Segment revenue decreased by $18.8 million, or 7%, due to unfavorable realized prices, partially offset by favorable volume and mix.
- Segment Adjusted EBITDA decreased by $9.6 million, or 10%, primarily due to lower realized prices, partially offset by lower operational costs.
Seaborne Metallurgical Segment:
- Segment revenue decreased by $26.9 million, or 11%, due to unfavorable realized prices, partially offset by favorable volume.
- Segment Adjusted EBITDA decreased by $35.1 million, or 73%, primarily due to lower realized prices.
Powder River Basin Segment:
- Segment revenue increased by $21.5 million, or 8%, due to favorable volume and realized prices.
- Segment Adjusted EBITDA increased by $19.9 million, or 121%, driven by the favorable volume and price impacts as well as lower operational costs.
Other U.S. Thermal Segment:
- Segment revenue decreased by $22.9 million, or 12%, primarily due to decreased revenue from sales contract cancellation settlements and unfavorable realized prices and volume.
- Segment Adjusted EBITDA decreased by $13.6 million, or 29%, mainly due to the decline in sales contract cancellation revenue.
Corporate and Other Segment:
- Segment Adjusted EBITDA improved by $21.9 million, or 49%, primarily due to favorable foreign currency impacts and lower costs at closed and suspended operations, partially offset by unfavorable results from the company’s Middlemount joint venture.
Strengths and Weaknesses
Strengths:
- Diversified portfolio of coal assets across different regions and product types (metallurgical and thermal coal)
- Strong market positions in key coal basins like the Powder River Basin
- Ongoing cost management and operational improvements driving better profitability in some segments
- Healthy liquidity position with $1.1 billion in available cash and credit facilities
Weaknesses:
- Exposure to volatile seaborne coal pricing, which has put pressure on revenue and profitability in the Seaborne Thermal and Seaborne Metallurgical segments
- Declining performance in the Other U.S. Thermal segment due to lower sales contract settlements and unfavorable pricing
- Potential regulatory risks related to environmental regulations, carbon emissions, and industrial relations laws in Australia
Outlook and Future Prospects
Looking ahead, Peabody faces a mixed outlook for its coal markets. In the seaborne thermal coal market, global prices have softened due to weaker demand and oversupply, particularly in China and India. However, the company expects stronger demand as summer restocking requirements in the Northern Hemisphere begin and global natural gas markets remain volatile.
In the seaborne metallurgical coal market, prices have also softened due to seasonal weakness in steel demand, particularly in China. While metallurgical coal supply has generally been ample, ongoing operational disruptions at some prominent mines globally could tighten the market. Buyers may also take a cautious approach to procurement given the complex international trade environment.
In the U.S., electricity demand and coal’s share of generation have increased year-over-year, supporting stronger performance in the Powder River Basin segment. However, the company continues to face regulatory uncertainty related to environmental regulations, carbon emissions, and industrial relations laws in Australia.
Peabody’s development of the Centurion Mine, an underground longwall metallurgical coal mine in Australia, remains on track, with the company expecting to begin producing continuous miner coal from Centurion North in the third quarter of 2025.
The company’s planned acquisition of a portion of Anglo American’s metallurgical coal portfolio in Australia faces some uncertainty due to a recent “material adverse change” related to the Moranbah North Mine. If the issue is not resolved, Peabody may elect to terminate the acquisition.
Overall, Peabody’s financial performance remains sensitive to global coal market dynamics, regulatory changes, and the successful execution of its strategic initiatives, including the Centurion Mine development and the potential Anglo acquisition. The company’s diversified asset base, cost management efforts, and healthy liquidity position provide some resilience, but the outlook remains mixed given the complex and volatile operating environment.
