NYSE:BTU
PEABODY ENERGY CORP
A major U.S. coal producer supplying power plants and steel mills with high-grade thermal and metallurgical coal reserves.
Key Metrics
Investment Thesis
Bull Case
Peabody offers high dividend yield potential with $36.5M in dividends paid while maintaining substantial cash reserves of $1.28B and strong operating cash flow. The company possesses some of the lowest-cost coal reserves in North America, providing a margin of safety if commodity prices recover or stabilize. Strategic partnerships and long-term supply contracts with major utilities could provide revenue stability during periods of market downturn.
Bear Case
The shift away from fossil fuels creates significant long-term existential risk as thermal coal demand permanently declines in key markets. The company's substantial retained earnings deficit of $1.36B suggests accumulating losses that could erode equity value over time without a turnaround. High capital expenditure requirements of $411.4M in a shrinking industry may not yield sufficient returns to justify the investment cost.
About PEABODY ENERGY CORP
Peabody Energy Corp is a leading North American coal mining company focused on producing high-quality thermal and metallurgical coal. The company primarily serves the power generation market and steel manufacturing industries across the United States and Canada. With operations spanning multiple states, Peabody delivers essential energy commodities while navigating complex regulatory landscapes.
Analysis
Management Discussion
Recent financial performance shows a sharp contraction in profitability with net income dropping to a loss of $42.5M in 2025 from $403.5M in 2024, reflecting lower coal prices and increased operational pressures. Revenue declined to $3.86B from $4.24B the prior year as volumes adjusted to market conditions, while capital expenditures of $411.4M indicate continued investment in asset maintenance and potential future projects. Cash flow from operations remains positive at $333.7M, supporting debt service despite a net profit deficit and growing retained earnings deficit.
Industry Overview
The coal industry is experiencing structural transformation due to increasing renewable energy adoption and decarbonization policies globally. While metallurgical coal remains relatively resilient compared to thermal coal, overall demand faces downward pressure from electric vehicle growth and grid modernization. Companies in this sector must navigate tightening environmental regulations and potential carbon pricing mechanisms that could increase operating costs.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $4.98B | $4.95B | $4.24B | $3.86B |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $4.98B | $4.95B | $4.24B | $3.86B |
| Operating Expenses | $3.60B | $3.87B | $3.79B | $3.94B |
| Operating Income | $1.38B | $1.07B | $445.3M | $-80.1M |
| G&A | $88.8M | $90.7M | $91.0M | $105.0M |
| Stock-Based Comp | $8.4M | $6.9M | $7.3M | $13.8M |
| D&A | $317.6M | $321.4M | $343.0M | $384.5M |
| Other OpEx | $3.51B | $3.78B | $3.70B | $3.84B |
| Non-Operating Income | $-103.0M | $50.1M | $70.8M | $46.6M |
| Interest Expense | $140.3M | $59.8M | $46.9M | $43.9M |
| Interest Income | $18.4M | $76.8M | $71.0M | $55.4M |
| Pre-Tax Income | $1.28B | $1.12B | $516.1M | $-33.5M |
| Income Tax | $-38.8M | $308.8M | $108.8M | $8.8M |
| Continuing Ops | $1.32B | $816.0M | $407.3M | $-42.3M |
| Discontinued Ops | $1.7M | $-400.0K | $-3.8M | $-200.0K |
| Net Income | $1.32B | $815.6M | $403.5M | $-42.5M |
| Minority Interest | $22.0M | $56.0M | $32.6M | $10.4M |
| Net to Common | $1.30B | $759.6M | $370.9M | $-52.9M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $2.37B | $2.02B | $1.78B | $1.56B |
| Cash & Equivalents | $1.31B | $969.3M | $700.4M | $575.3M |
| Accounts Receivable | $465.5M | $389.7M | $359.3M | $314.9M |
| Inventory | $296.1M | $351.8M | $393.4M | $383.2M |
| Other Current Assets | $303.6M | $308.9M | $327.6M | $285.4M |
| Long-Term Assets | $3.24B | $3.94B | $4.17B | $4.25B |
| PP&E (Net) | $2.87B | $2.84B | $3.08B | $3.15B |
| Operating Leases | $26.9M | $61.9M | $119.3M | $121.2M |
| Other LT Assets | $312.3M | $986.8M | $913.7M | $926.4M |
| Total Assets | $5.61B | $5.96B | $5.95B | $5.81B |
| Current Liabilities | $918.7M | $979.0M | $827.5M | $842.2M |
| Current Leases | $16.8M | $17.3M | $32.4M | $36.0M |
| Taxes Payable | $25.9M | $120.8M | $10.7M | $2.0M |
| Other Current Liab | $876.0M | $840.9M | $784.4M | $804.2M |
| Long-Term Liabilities | $1.40B | $1.38B | $1.42B | $1.38B |
| LT Operating Leases | $11.0M | $47.7M | $86.7M | $87.5M |
| Other LT Liab | $1.39B | $1.33B | $1.33B | $1.30B |
| Total Liabilities | $2.32B | $2.35B | $2.24B | $2.23B |
| Shareholders' Equity | $3.29B | $3.61B | $3.71B | $3.58B |
| Retained Earnings | $383.9M | $1.11B | $1.45B | $1.36B |
| AOCI | $242.5M | $189.6M | $138.8M | $101.1M |
| Treasury Stock | $1.37B | $1.74B | $1.93B | $1.93B |
| Total L&E | $5.61B | $5.96B | $5.95B | $5.81B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $1.32B | $815.6M | $403.5M | $-42.5M |
| Non-Cash Adjustments | $-486.6M | $201.6M | $436.0M | $520.1M |
| Working Capital Changes | $341.1M | $18.3M | $-233.0M | $-143.9M |
| Cash from Operations | $1.17B | $1.04B | $606.5M | $333.7M |
| Capital Expenditures | $221.5M | $348.3M | $401.3M | $411.4M |
| Cash from Investing | $-28.7M | $-342.6M | $-598.1M | $-346.6M |
| Debt Issuances | $545.0M | $0 | $0 | — |
| Share Buybacks | — | $347.7M | $183.1M | $0 |
| Dividends Paid | — | $30.6M | $37.6M | $36.5M |
| Cash from Financing | $-681.6M | $-460.3M | $-276.0M | $-85.2M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $463.3M | $232.6M | $-267.6M | $-98.1M |
| Beginning Cash | $954.3M | $1.42B | $1.65B | $1.38B |
| Ending Cash | $1.42B | $1.65B | $1.38B | $1.28B |
Frequently Asked Questions
How does PEABODY ENERGY CORP make money?
The company's revenue is derived primarily from the sale of thermal coal used for electricity generation and metallurgical coal used in iron ore pelletizing for steel production. Additional revenue streams include byproduct sales and royalties from coal lease operations. The financial data reflects a single consolidated mining entity with diversified asset locations rather than distinct geographic or product silos.
What are the main risks for BTU?
Coal demand faces structural decline due to the global energy transition toward renewable sources and stricter environmental regulations. The company operates in a capital-intensive industry where commodity price fluctuations directly impact earnings stability. Environmental liabilities, including water management and methane emissions compliance, pose potential financial and reputational threats. Geopolitical tensions or supply chain disruptions affecting rail transport could impair logistics costs and delivery capabilities.
What is BTU's competitive advantage?
Peabody benefits from low-cost, long-life reserves located in resource-rich basins like the Powder River Basin, providing superior cost competitiveness. The company maintains significant scale advantages through large underground and surface mining operations that optimize extraction efficiency. Access to key customers such as major power utilities and steel mills provides stable offtake opportunities despite market volatility.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.