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BTU
Peabody Energy
Earnings
BTU | Earnings Review
Peabody Energy Corporation | 2026 Q1 reported May 5, 2026 BMO | Analysis date: May 5, 2026 | Daloopa company_id 6141
Revenue
$973.3M (+0.9% beat)
vs $964.4M Street; +3.9% YoY (first growth Q in 5); modest beat overshadowed by EBITDA miss
Adj EBITDA
$82.5M (-49.6% miss)
vs $129.5M Street; -43% YoY; lowest in 8Q; ~$80M Centurion commissioning hit (electrical/mechanical, roof/floor, shield misalignment)
Diluted EPS
-$0.26 loss
vs +$0.07 expected; net loss to common $32.4M; stock -3.5% premarket
FY26 Guide
CUT (Centurion delay)
Centurion sales cut from 3.5Mt → 2.5Mt; met cost raised +$15/t to $123-133; FY EBITDA down ~$100-150M; longwall move shifted into early 2027 (was Q4'26)
Operational miss; thesis under stress. Modest revenue beat ($973.3M / +3.9% YoY vs $964.4M Street) overshadowed by a 49.6% Adj EBITDA miss ($65.3M / $82.5M actual vs $129.5M consensus) and a -$0.27 GAAP EPS vs +$0.07 expected. Variance was operational, not commodity-driven: ~$80M Centurion longwall commissioning hit (electrical/mechanical issues, roof/floor conditions, shield misalignment). Stock -3.5% premarket. Guidance: CUT. FY26 Centurion sales reduced from 3.5Mt to 2.5Mt; met cost guide raised ~$15/t to $123-133/t (vs $113/t Feb); FY26 EBITDA down implied ~$100-150M; the planned Q4'26 longwall move was deferred into early 2027 to maximize H2 production. Bright spots: Seaborne Thermal segment $41M Adj EBITDA at 17% margin (sequentially expanded), volumes +500k tons sequentially, with post-Iran/Indonesia exogenous tailwind on Newcastle pricing; Other US Thermal stabilized; PRB EBITDA halved sequentially on diesel pass-through (fixed-price contracts have no escalator). Multi-quarter narrative whipsaw — 3 HIGH-severity contradictions identified: (1) Centurion ramp "well ahead of original schedule" Q4'25 → 29% volume cut + longwall delay 3 months later; (2) Seaborne Met cost guide raised from $113/t (Feb) to $123-133/t (May), reversing the multi-quarter cost-outperformance narrative; (3) Capital returns softened from "closer to 100% versus 65%" of FCF (Q4'25) to "a couple of opportunities" including 2028 convert dilution; cash down ~$75M QoQ. Tone: defensive damage-control vs Q4'25 triumphal. Key catalysts: (1) Centurion full-rate longwall production starting June 2026 / 2H'26 ramp — gating event for met EBITDA recovery; (2) Met coal cycle (BMI raised 2026 PHCC to $210/t; India steel +9.3% to 180Mt; structural coking coal shortage; Centurion's premium 8-8.5% ash product has 8-9 India contracts in place); (3) 2H'26 capital allocation pivot — Spurbeck explicitly flagged buybacks AND 2028 convert dilution management as uses of "substantial" 2H'26 FCF, with $500M cash / $850M+ liquidity backing optionality. Watch items: (1) Q2'26 Centurion mechanical performance — 300k Q2 sales reset; (2) US thermal contract resets higher post-AI/data-center baseload demand (Trump EO directing DoD facilities to coal-fired power = symbolic tailwind for retirement deferrals); (3) UNP wins on West Coast PRB export volumes (Guaymas pilot, 5-10Mt potential); (4) Premium HCC pricing +25% YoY divergent from high-vol A -12% YoY — own premium HCC names (HCC, BHP, GLEN), cautious on HVA-mix; (5) Seaborne thermal: Indonesia cutting ~25% of exports + Asian summer burn ahead. Read: bull case is 2H'26 Centurion ramp + met coal cycle continuation + AI/data center thermal demand pull. Bear case is operational execution risk (Centurion has now disappointed twice in 6 months) + cost inflation outrunning commodity recovery. Multi-quarter contradiction pattern warrants haircut on H2'26 ramp confidence.
Key Metrics Trends
| Metric | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 |
|---|---|---|---|---|---|---|---|---|---|
| Seaborne Thermal rev | $284M | $308M | $313M | $309M | $265M | $195M | $243M | $206M | $198M |
| Seaborne Thermal rev YoY % | - | - | - | - | -6.6% | -36.6% | -22.5% | -33.5% | -25.5% |
| Seaborne Met rev | $247M | $294M | $242M | $272M | $220M | $252M | $259M | $305M | $283M |
| Seaborne Met rev YoY % | - | - | - | - | -10.9% | -14.3% | +6.8% | +12.4% | +28.6% |
| Powder River Basin rev | $254M | $222M | $305M | $318M | $276M | $276M | $301M | $300M | $290M |
| Powder River Basin rev YoY % | - | - | - | - | +8.5% | +24.2% | -1.3% | -5.4% | +5.0% |
| Other US Thermal rev | $192M | $202M | $217M | $212M | $169M | $155M | $192M | $192M | $184M |
| Other US Thermal rev YoY % | - | - | - | - | -12.0% | -23.2% | -11.4% | -9.8% | +9.4% |
| Total revenue | $984M | $1.0B | $1.1B | $1.1B | $937M | $890M | $1.0B | $1.0B | $973M |
| Total revenue YoY % | - | - | - | - | -4.7% | -14.6% | -7.0% | -9.0% | +3.9% |
| Total Adj EBITDA | $160M | $310M | $225M | $177M | $144M | $93M | $100M | $118M | $82M |
| Total Adj EBITDA YoY % | - | - | - | - | -10.3% | -69.9% | -55.7% | -33.2% | -42.7% |
| Seaborne Thermal Adj EBITDA | $94M | $104M | $120M | $112M | $84M | $34M | $41M | $64M | $48M |
| Seaborne Thermal Adj EBITDA YoY % | - | - | - | - | -10.2% | -67.9% | -65.8% | -43.2% | -42.4% |
| PRB Adj EBITDA | $16M | $18M | $52M | $53M | $36M | $43M | $52M | $45M | $24M |
| PRB Adj EBITDA YoY % | - | - | - | - | +121.3% | +141.6% | +0.0% | -15.0% | -34.7% |
| Other US Thermal Adj EBITDA | $46M | $35M | $28M | $40M | $33M | $14M | $7M | $18M | $38M |
| Other US Thermal Adj EBITDA YoY % | - | - | - | - | -29.2% | -61.9% | -75.7% | -55.3% | +14.9% |
| Diluted EPS (Cont Ops) | $0.30 | $1.43 | $0.74 | $0.26 | $0.27 | $-0.22 | $-0.57 | $0.09 | $-0.26 |
| Diluted EPS (Cont Ops) YoY % | - | - | - | - | -10.0% | -115.4% | -177.0% | -65.4% | -196.3% |
_Trajectory: Stabilization stalled — top-line inflected positive in Q1'26 (+3.9% YoY, first growth Q in 5), but profitability deteriorated. Consolidated Adj EBITDA has compounded lower for four consecutive years ($1,844.7M FY22 → $454.9M FY25) and Q1'26 stepped down again to $82.5M (-43% YoY) — lowest 8Q level. Seaborne Met EBITDA flipped to derived ~$(27.5)M loss on Centurion ramp costs (vs +$152M Q2'24 peak); PRB EBITDA halved to $23.7M (-35% YoY) on diesel pass-through; Seaborne Thermal at $48.5M and Other US Thermal at $37.8M were the only YoY bright spots. Diluted EPS swung back to a -$0.26 loss vs $0.30 in Q1'24. Cost pressure outrunning the volume/comp tailwind — recovery thesis cannot rest on either flagship segment until Centurion full-rate production materializes in 2H'26. "Cautious / cost-pressure trough phase" — Q2'26 segment costs and seaborne met realizations are the gating variable._
Beat/Miss
Guidance
Catalysts
Street Q&A
Contradictions
Read-Throughs
This Quarter vs Consensus
| Metric | Consensus | Actual | Variance | Read |
|---|---|---|---|---|
| Revenue | $964.4M | $973.3M | +$8.9M / +0.9% | Beat |
| Adj EBITDA | $129.5M | $82.5M | -$47M / -49.6% | Significant Miss |
| Diluted EPS | +$0.07 | -$0.26 | -$0.33 | Significant Miss |
| Seaborne Met EBITDA | Modest positive | ~$(27.5)M (derived) | -$60M+ | Swung negative on Centurion |
| Seaborne Thermal EBITDA | — | $48.5M | +50% margin expansion | Bright spot |
| PRB EBITDA | — | $23.7M | -35% YoY | Diesel pass-through drag |
| Other US Thermal EBITDA | — | $37.8M | +15% YoY | Bright spot |
| Centurion Q1 sales | — | Severely disrupted | — | Q2 reset to 300k tons |
| L4Q Adj EBITDA beat rate | — | 1/4 = 25% | — | Structurally weak |
| L8Q Adj EBITDA beat rate | — | ~3/8 = 38% | — | Weak since Q2'24 cycle peak |
| Stock reaction | — | -3.47% premarket | — | Negative |
Pattern: Structurally weak earnings cadence since the Q2'24 met-coal cycle peak ($309.7M Adj EBITDA). L4Q Adj EBITDA beat rate is just 25%; L8Q ~38%. Q1'26 is the lowest reported Adj EBITDA in the 8Q window — down from the Q2'24 peak and the 4th consecutive year of compressed annual EBITDA. Variance source has rotated: prior misses were commodity-price driven; Q1'26 is operational (Centurion). The other segments (Seaborne Thermal, Other US Thermal) actually beat plan. Mgmt expects Centurion at full longwall rates in H2 2026; the planned Q4'26 longwall move is now deferred to early 2027 to maximize H2 production. Mgmt's variance explanation: ~$80M Centurion longwall commissioning hit (electrical/mechanical issues, roof/floor conditions, shield misalignment). Also pushed FY met volume guidance down 1Mt and cost guidance up ~$15/t. The Street largely accepted the Centurion drag narrative — no analyst directly probed the EBITDA miss vs consensus.
Guidance Deep Dive
| Metric | Prior (Feb'26) | New (May'26) | Δ | Read |
|---|---|---|---|---|
| Centurion 2026 Sales (tons) | 3.5 Mt | 2.5 Mt | -1 Mt / -29% | Major cut |
| Seaborne Met cost ($/t) | $113/t | $123-133/t | +~$15/t | Reverses cost-outperformance narrative |
| Q4'26 longwall move | Q4 2026 | Early 2027 | Deferred | Defends H2'26 production |
| Q2'26 Centurion sales | — | 300k tons (commissioning) | — | Recovery from Q1 disruption |
| FY26 Adj EBITDA implied (vs prior) | — | Down ~$100-150M | -$100-150M | Implied cut |
| Seaborne Thermal pricing (FY26) | Trading range | Bullish (post-Iran, Indonesia cuts) | Tailwind | Modest offset |
| PRB cost ($/t) | Lower | Higher (diesel pass-through) | Worse | Fixed-price contracts have no escalator |
| Capital allocation | "Closer to 100% vs 65% of FCF" | "Couple of opportunities" incl. 2028 convert | Softened | Walked back |
| Liquidity | Strong | $500M cash / $850M+ liquidity | Maintained | Backstop |
| FY26 capex | — | Reaffirmed | — | — |
Tone arc: triumphal Q4'25 → defensive damage-control Q1'26. Q4'25 mgmt described Centurion as "well ahead of original schedule" and confirmed 3.5Mt FY26 plan with detailed quarterly cadence. Capital returns explicitly signaled to move "closer to 100% versus 65%" of FCF "with Centurion development risk off the table." Q1'26 reset all of these: -29% volume cut, +$15/t cost increase, longwall move pushed into 2027, capital returns softened to "couple of opportunities" — a sharp narrative whipsaw. Bull case rests on 2H'26 Centurion full-rate production starting June 2026 + met coal cycle continuation (BMI raised 2026 PHCC forecast to $210/t; India steel +9.3% to 180Mt; structural coking coal shortage). Risk caveats: (1) Centurion has now disappointed twice in 6 months — pattern of optimistic forward anchors getting walked back; (2) Premium HCC +25% YoY but high-vol A -12% YoY — Centurion's 8-8.5% ash product is premium-grade with 8-9 India contracts secured, but mix shift risk if HVA continues to lag; (3) Seaborne thermal pivot from "trading range" to bullish driven by exogenous Iran/Indonesia events (not endogenous demand); (4) PRB margins ~$1/t on diesel pass-through — fixed-price contracts have no escalator; new contracts will reset higher; (5) US thermal contract resets are coming but timing dependent on coal plant retirement deferrals. Watch: Q2'26 Centurion mechanical performance + commissioning completion.
Upcoming Catalysts
| # | Catalyst | Timing | What to Watch | Read |
|---|---|---|---|---|
| 1 | Centurion full-rate longwall production / 2H'26 ramp | Starting June 2026; full-rate H2'26 | Mgmt targeting end-May commissioning completion; gating event for FY26 met EBITDA recovery + 2H FCF inflection | Gating — make-or-break |
| 2 | Met coal cycle continuation | FY26-FY27 | BMI raised 2026 PHCC to $210/t; India steel +9.3% to 180 Mt; structural coking coal shortage; Centurion's premium 8-8.5% ash product has 8-9 India contracts in place | Supportive — premium HCC pricing |
| 3 | 2H'26 capital allocation pivot | 2H'26 | Spurbeck flagged buybacks + 2028 convert dilution management as uses of "substantial" 2H'26 FCF; $500M cash / $850M+ liquidity backing optionality | Optionality (now softened) |
| 4 | Newcastle thermal coal pricing recovery | FY26-2H | March Newcastle +$20/t on Iran conflict; Indonesia cutting ~25% of exports; LNG high; Asian summer burn ahead | Exogenous tailwind |
| 5 | US coal plant retirement deferrals (AI/data center power demand) | FY26-FY28 | Trump EO directing DoD facilities to coal-fired power; "always-on baseload" narrative for AI/data centers; EIA: 2025 US coal-fired retirements lowest in 15 years | Structural support for US thermal |
| 6 | PRB contract resets higher | 2H'26 → FY27 | New PRB contracts will reset higher post-AI/data-center thermal demand pull (current fixed-price have no diesel escalator) | Margin recovery |
| 7 | West Coast PRB exports via Guaymas (Mexico) | FY26-FY28 | 5-10 Mt potential; UNP wins on West Coast volumes | New export channel |
| 8 | Seaborne Met cost trajectory recovery | 2H'26 → FY27 | Centurion at full-rate cost reductions; mix shift toward premium HCC | Recovery pending operational execution |
| 9 | Met coal grade stratification — premium HCC vs HVA | Ongoing | Premium HCC +25% YoY; low-vol PCI +14%; high-vol A -12% YoY (divergent) | Centurion is premium |
| 10 | Anglo coal asset reset references / M&A optionality | Ongoing | Anglo advancing coal sale after Peabody walk-away; could reset valuations | Watch item |
| 11 | China coal demand | Ongoing | Domestic still soft; export-led recovery narrative | Neutral |
| 12 | ESG / financing capacity | Ongoing | Coal sector financing remains constrained; BTU navigates with $850M liquidity | Structural overhang |
Street Q&A
| # | Analyst (Firm) | Topic | Mgmt Response | Quality |
|---|---|---|---|---|
| 1 | Lucas Pipes (B. Riley) | Centurion ramp mechanics + H2'26 confidence | Detailed walk through commissioning issues — electrical/mechanical, roof/floor conditions, shield misalignment. Targeting end-May commissioning completion; full-rate H2'26 | Well Answered |
| 2 | Chris LaFemina (Jefferies) | Centurion contract % committed for 2026 production | Roberts declined to specify citing commercial sensitivity | Deflected — commercial sensitivity |
| 3 | Chris LaFemina follow-up | Freight + PHCC realization for Centurion product | Skipped (combined with first question) | Partial |
| 4 | Daniel Eadie (UBS) | PRB cost structure + diesel pass-through | PRB margins ~$1/t; current fixed-price contracts have no fuel escalator; new contracts will reset higher | Well Answered |
| 5 | Daniel Eadie follow-up | PRB volume cadence + commercial discussions | Mgmt walked through volume + commercial dynamics; mix/R&M timing | Well Answered |
| 6 | Adam Jancic (BMO) | Seaborne thermal pricing dynamics | March Newcastle +$20/t on Iran conflict; Indonesia cutting exports; bullish setup for 2H | Well Answered |
| 7 | Nathan Martin (Benchmark) | West Coast PRB exports via Guaymas Mexico | 5-10 Mt potential; UNP wins on volumes; pilot proof-of-concept underway | Well Answered |
| 8 | Bill Giles (B. Riley) | Capital allocation post-Centurion + 2028 convert dilution | Spurbeck: "Couple of opportunities" including 2028 convert dilution management; $500M cash / $850M+ liquidity backing | Partial — softened from Q4'25 |
| 9 | Bill Giles follow-up | Buyback timing + magnitude | 2H'26 FCF dependent; substantial cash flow expected post-Centurion ramp | Partial |
| 10 | Various follow-ups | Centurion Q2 production reset / cost trajectory | Q2 sales reset to 300k tons (commissioning); cost inflation driven by labor/repair | Well Answered |
| 11 | Various | Met coal grade premium dynamics | Premium HCC +25% YoY; Centurion's 8-8.5% ash product has secured 8-9 India contracts | Well Answered |
| 12 | Various | Other US Thermal / Seaborne Thermal volume strength | Volumes +500k tons sequentially in Seaborne Thermal; pricing bullish post-Iran/Indonesia | Well Answered |
Contradictions
| # | Topic | Severity | Statement A | Statement B | Why it's a tension |
|---|---|---|---|---|---|
| 1 | Centurion ramp — "well ahead of schedule" → 29% cut + delay | HIGH | Q4'25 (Feb'26): "Well ahead of original schedule"; confirmed 3.5M ton plan with detailed quarterly cadence | Q1'26 (May'26): FY guidance cut to 2.5M tons (-29%); Q2 sales reset to 300K; Q4'26 longwall move pushed into 2027 | Three months between calls; major operational disappointment; pattern of optimistic forward anchors getting walked back |
| 2 | Seaborne Met cost guidance reversal | HIGH | FY26 met cost guide $113/t (Feb'26) — multi-quarter cost outperformance narrative; Centurion described as eventual lowest-cost mine | Q1'26: cost guide raised to $123-133/t (+$15/t mid); Centurion delivered ~$80M EBITDA hit in Q1 | Reverses the multi-quarter cost-outperformance narrative; ex-tariff margin profile is materially weaker than Q4'25 implied |
| 3 | Capital returns — softened from "100%" to "couple of opportunities" | MEDIUM-HIGH | Q4'25: Explicit signal that payout could move "closer to 100% versus 65%" with "Centurion development risk off the table" | Q1'26: Softened to "a couple of opportunities" including 2028 convert dilution management; cash down ~$75M QoQ | Telegraphed aggressive returns then walked back as Centurion risk re-emerged; investors should not model steady buyback |
| 4 | Seaborne thermal outlook shift | LOW-MEDIUM | Q4'25: "Trading range" outlook for seaborne thermal | Q1'26: Bullish pivot driven by Iran conflict + Indonesia cuts (exogenous, not endogenous demand) | Pivot driven by external events, not underlying demand recovery — durability uncertain |
| 5 | PRB cost — first miss after multiple beats | LOW | FY25 PRB cost outperformance narrative | Q1'26: First miss vs plan after multiple 2025 beats; partially exogenous (diesel) but also mix/R&M timing | Cost pressure rotating to PRB; not all margin compression is Centurion-specific |
Indirect Read-Throughs
| Name | Relationship | What BTU signaled | Read-through |
|---|---|---|---|
| Warrior Met Coal (HCC) | Met coal pure-play peer | Premium HCC pricing +25% YoY; India structural shortage; BMI raised 2026 PHCC forecast to $210/t | POSITIVE — premium HCC pricing |
| Glencore (GLEN.L) | Diversified miner / coal | Newcastle +$20/t on Iran; Indonesia cutting ~25% exports; Asian summer burn ahead | POSITIVE — seaborne thermal exposure |
| BHP / Anglo American | Premium HCC peers | Premium HCC pricing strength; high-vol A -12% YoY divergence | POSITIVE for premium HCC mix |
| Ramaco Resources (METC) | Met coal peer | Premium HCC strong but HVA -12% — mix matters | MIXED — depends on mix |
| Arch Resources (ARCH) | PRB + East Coast met peer | PRB cost pressure on diesel; East Coast met exports benefit from premium HCC pricing | MIXED |
| CONSOL / CNX Resources (CEIX) | Thermal coal peer | US thermal contract resets coming; Centurion-style ramp risks; AI/data center baseload demand | POSITIVE — US thermal demand |
| Vistra (VST) / Constellation (CEG) / Talen (TLN) | Power IPPs | Trump EO directing DoD facilities to coal-fired power; "always-on baseload" narrative; coal plant retirement deferrals | POSITIVE — US coal-to-power thesis |
| NRG / AES | Power IPPs | Same — retirement deferrals + AI demand pull | POSITIVE |
| Hyperscalers (AMZN/MSFT/GOOGL/META) | Implicit data center power demand | AI infra capex driving "always-on" baseload demand; coal retirement deferrals | POSITIVE — capex narrative |
| Union Pacific (UNP) | Rail customer (Guaymas exports) | 5-10 Mt West Coast PRB export potential via Guaymas pilot | POSITIVE — new volume |
| Coal India / Indian steel mills | Met coal customers | India steel +9.3% to 180Mt; structural coking coal shortage; 8-9 India contracts for Centurion | POSITIVE |
| Indonesian coal exporters (Adaro/Bumi/ITMG) | Seaborne thermal competitors | Indonesia cutting ~25% of exports — supply constraint | NEGATIVE for them, POSITIVE for BTU pricing |
| GE Vernova (GEV) | Gas turbine alternative (not named) | Trump EO + retirement deferrals = coal stays in baseload mix; partial offset to gas turbine narrative | NEUTRAL |
| LNG / Cheniere | Energy export | LNG high prices supporting Newcastle; gas-to-coal switching narrative | NEUTRAL |
| China coal market | Macro | Domestic soft; export-led recovery narrative | Neutral |
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