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Peabody Posts $1B Loss In Second Quarter

Peabody Energy
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Peabody Energy suspended its shareholder dividends Tuesday after announcing a $1 billion dollar second quarter loss—the latest in a streak of bad earnings reports.

Peabody is the world’s largest coal miner, with operations in Australia and across the US. Like many of its peers, it's been hammered recently by low natural gas prices, slumping demand for metallurgical coal and uncertainty surrounding new environmental regulations.

“There is no question that these are difficult and indeed unprecedented times for both coal markets and related capital markets," CEO Glenn Kellow said on a call with investors and analysts. 

This quarter’s losses were mainly from the company’s Australian operations, although unusually heavy rainfall in the Powder River Basin this spring and summer also cost the company almost $40 million.

"Make no mistake," Kellow said. "Peabody is committed to work through these highly demanding conditions as we take aggressive actions, on multiple fronts, to preserve and enhance long-term value.”

In addition to suspending dividends in order to cut costs, the company is also looking at a reverse stock split, which would reduce the number of Peabody shares and increase its stock price. A decision on whether to move forward with that needs to be approved by shareholders.

Peabody was the first of the major Powder River Basin coal companies to report its second quarter earnings. Other companies will be reporting their earnings in coming weeks. 

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