Peabody Energy Corp., the largest U.S. coal producer, said 2010 earnings before interest, taxes, depreciation and amortization will be lower than an October forecast because of the recent flooding in Australia.
The company plans to report Ebitda near the midpoint of its July outlook of $1.7 billion to $1.9 billion, below the $1.85 billion to $1.9 billion it forecast in October, St. Louis-based Peabody said today in a statement. The coal producer was expected to have Ebitda of $1.89 billion, according to the average of 20 analyst estimates compiled by Bloomberg.
Peabody said on Dec. 30 that it declared force majeure in Queensland, a measure that allows companies to miss contracted deliveries because of circumstances beyond their control. Floods in the state are the worst in 50 years and have forced the evacuation of 4,000 people.
“The Australian floods are in everybody’s stream of consciousness right now,” said Jeremy Sussman, an analyst at Brean Murray Carret & Co. in New York. “It’s not shocking, but at the same time the Street numbers are going to have to come down.”
Peabody rose 4 cents to $61.64 at 9:59 a.m. in New York Stock Exchange composite trading. The shares have gained 22 percent in the past year.
Sussman said he expects prices for coking coal, used to help make steel, to rise throughout the year. He said that will help Peabody “basically offset” any lower volumes caused by the floods.
He expects prices for metallurgical coal to average $250 a ton in 2011, up from an earlier forecast of $220, and $245 a ton in 2012, up from a previous estimate of $220.
Prices reached $300 a metric ton in 2008 when Queensland was barraged by floods.
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