Bullish Sentiment for Patriot Coal and Peabody Energy Resumes
04 November 2011 - 1:16PM
Marketwired
While the Coal Industry has taken a beating in recent months
regarding global economic worries and difficulty competing with low
natural gas prices, most analysts argue that the coal market is set
to explode. Coal demand is projected to increase significantly over
the next 25 years due to the growth in industry and infrastructure
in emerging markets which could benefit companies in the industry
such as Peabody Energy Corporation and Patriot Coal Corporation.
The Bedford Report examines the outlook for companies in the coal
industry and provides equity research on Patriot Coal Corporation
(NYSE: PCX) and Peabody Energy Corporation (NYSE: BTU). Access to
the full company reports can be found at:
www.bedfordreport.com/PCX
www.bedfordreport.com/BTU
Sterne Agee analyst Michael Dudas said in a note to clients that
recent earnings reports from coal companies show that demand has
been stronger than expected. That is raising hopes that coal prices
will stay firm, and deliver better profits to companies like
Peabody Energy Corp. that mine and sell coal.
The analyst noted that inventories of coal are not piling up -
considered the first sign that demand is dropping. He said monthly
coal inventories have fallen for five straight months and are now
13 percent lower than 2010 levels.
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so investors can stay ahead of the crowd and make the best
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Peabody Energy said that its third-quarter earnings climbed 22
percent and demand for coal is still rising for power generation in
Asia and Europe. Earlier this year Peabody signed an agreement to
develop a huge Chinese surface mine expected to produce 50 million
tons of coal a year for decades. The coal producer predicted strong
results for the rest of 2011, as it undertakes what it called its
biggest global expansion in its 128-year history.
Patriot reported a net loss of $49.5 million, or 54 cents per
share, for the three months ended Sept. 30. That compares with a
loss of $46 million, or 51 cents per share, a year ago. The
earnings beat Wall Street estimates while revenue was short.
Analysts had expected a loss of 57 cents per share on revenue of
$592.4 million, according to FactSet.
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