Peabody Energy Corporation (NYSE:BTU) is set to report fourth-quarter 2017 results on Feb 7, before market opens. In the last quarter, earnings were 8.76% higher than expected.
Let’s see how things are shaping up prior to the upcoming results.
Factors to be Considered
Peabody Energy projected that coal export to India is likely to increase in the fourth quarter, primarily on increased domestic coal usage and drop in the stockpiles.
During the quarter, the company sold its inactive Burton Mine for $11 million, which reduced Peabody Energy’s asset retirement obligation by $41 million. The company is well poised to gain from the expected improvement in thermal and metallurgical coal export from 2016 levels.
The company anticipates seasonal drop in Power River Basin (“PRB”) volumes in the fourth quarter, which will be offset by strong Australian shipments. For 2017, the company projects PRB sales in the range of 120-125 million tones, on the back of increased sales under existing contracts.
Earnings Whispers
Our proven model does not conclusively show that Peabody Energy is likely to beat estimates this quarter. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate of $1.40 and the Zacks Consensus Estimate of $1.40, is 0.00%.
Zacks Rank: Peabody Energy sports a Zacks Rank #1, which increases the possibility of a beat. However, the 0.00% ESP makes a beat uncertain.
We caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Peabody Energy Corporation Price and EPS Surprise
Peabody Energy Corporation Price and EPS Surprise | Peabody Energy Corporation Quote
Stocks to Consider
Here are some companies from the industry that you may want to consider instead, as our model shows that these have the right combination of elements to post an earnings beat this quarter.
Contura Energy (NS:CNTE) is expected to release fourth-quarter 2017 results on Mar 30. The company has an Earnings ESP of +31.93% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Warrior Met Coal (NYSE:HCC) is expected to release fourth-quarter 2017 results on Feb 14. The company has an Earnings ESP of +5.00% and a Zacks Rank #3.
Natural Recourse Partners (NYSE:NRP) is expected to release fourth-quarter 2017 results on Mar 5. The company has an Earnings ESP of +15.15% and a Zacks Rank #2.
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Peabody Energy Corporation (BTU): Free Stock Analysis Report
Natural Resource Partners LP (NRP): Free Stock Analysis Report
Warrior Met Coal Inc. (HCC): Free Stock Analysis Report
CONTURA ENERGY (CNTE): Free Stock Analysis Report
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