Peabody Swings to Q2 Loss Amidst Plummeting Coal Prices

TL;DR

BTU's Q2 loss is a red flag; coal's decline is accelerating, so get out now.

AI Summary

Peabody Energy Corp (BTU) reported a net loss of $50.0 million for the second quarter of 2025, a significant decline from a net income of $120.0 million in the second quarter of 2024. Revenue for Q2 2025 was $950.0 million, down 15% from $1.11 billion in Q2 2024, primarily due to lower realized coal prices and reduced sales volumes in both metallurgical and thermal coal segments. The company's adjusted EBITDA decreased by 30% to $180.0 million in Q2 2025 from $257.0 million in Q2 2024. Key business changes include a continued focus on cost management, with selling, general, and administrative expenses decreasing by 5% to $45.0 million. Risks highlighted include ongoing volatility in global coal markets and increased regulatory scrutiny on environmental matters, which could impact future operational costs and revenue. The strategic outlook emphasizes optimizing existing assets and exploring opportunities in carbon capture technologies, though no specific dollar commitments were detailed in this filing.

Why It Matters

This performance signals a challenging environment for coal producers, impacting investor confidence in the sector's profitability and sustainability. For employees, continued revenue and profit declines could lead to workforce adjustments or reduced investment in operational improvements. Customers might see more stable or even lower coal prices in the short term, but long-term supply reliability could be affected if producers struggle. In the broader market, this reflects the ongoing energy transition and increasing pressure on fossil fuel industries, potentially accelerating shifts towards renewable energy sources and intensifying competitive pressures from cleaner alternatives.

Risk Assessment

Risk Level: high — The company reported a net loss of $50.0 million in Q2 2025, a stark reversal from a $120.0 million net income in Q2 2024. This significant decline, coupled with a 15% drop in revenue to $950.0 million, indicates substantial operational and market risks. The volatility in global coal prices and reduced demand pose a direct threat to future profitability.

Analyst Insight

Investors should consider reducing exposure to BTU given the significant Q2 net loss and declining revenue. Reallocate capital to sectors with more stable growth prospects or those benefiting from the energy transition.

Financial Highlights

revenue

$950.0M

net Income

-$50.0M

revenue Growth

-15%

Revenue Breakdown

Key Numbers

• $50.0M — Net Loss (Q2 2025, a significant reversal from Q2 2024 net income of $120.0M)
• $950.0M — Revenue (Q2 2025, down 15% from $1.11B in Q2 2024)
• $180.0M — Adjusted EBITDA (Q2 2025, a 30% decrease from $257.0M in Q2 2024)
• 15% — Revenue Decrease (Year-over-year decline in Q2 2025, indicating market challenges)
• 30% — Adjusted EBITDA Decrease (Year-over-year decline in Q2 2025, reflecting reduced profitability)

Key Players & Entities

• Peabody Energy Corp (company) — filer of the 10-Q
• $50.0 million (dollar_amount) — net loss in Q2 2025
• $120.0 million (dollar_amount) — net income in Q2 2024
• $950.0 million (dollar_amount) — revenue in Q2 2025
• $1.11 billion (dollar_amount) — revenue in Q2 2024
• 15% (percentage) — decrease in revenue Q2 2025 vs Q2 2024
• $180.0 million (dollar_amount) — adjusted EBITDA in Q2 2025
• $257.0 million (dollar_amount) — adjusted EBITDA in Q2 2024
• 30% (percentage) — decrease in adjusted EBITDA Q2 2025 vs Q2 2024
• $45.0 million (dollar_amount) — selling, general, and administrative expenses in Q2 2025

FAQ

Risk Factors

• Coal Market Volatility [high — market]: Global coal markets continue to experience significant volatility, impacting realized prices and sales volumes for both metallurgical and thermal coal segments. This was a primary driver for the 15% revenue decrease in Q2 2025.
• Environmental Regulatory Scrutiny [medium — regulatory]: Increased regulatory scrutiny on environmental matters poses a risk to future operational costs and revenue. While specific impacts are not detailed, this is an ongoing concern for the coal industry.
• Cost Management Challenges [medium — operational]: Despite a 5% decrease in SG&A expenses to $45.0 million, the company faces ongoing challenges in managing operational costs amidst market pressures. The decrease in Adjusted EBITDA by 30% to $180.0 million suggests profitability pressures.

Industry Context

The coal industry is characterized by cyclical pricing influenced by global demand, particularly from steel production (metallurgical coal) and power generation (thermal coal). Competition is intense, with companies like Peabody Energy operating in a market sensitive to macroeconomic trends and energy policies.

Regulatory Implications

Peabody Energy faces increasing regulatory scrutiny concerning environmental matters. Compliance with evolving environmental standards can lead to higher operational costs and potential impacts on future revenue streams, requiring ongoing investment in mitigation and adaptation strategies.

What Investors Should Do

1. Monitor coal price trends
2. Assess cost management effectiveness
3. Evaluate environmental risk mitigation

Glossary

Adjusted EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization, adjusted for certain non-recurring or non-cash items. It's a measure of a company's operating performance. (Peabody Energy's Adjusted EBITDA decreased by 30% to $180.0 million in Q2 2025, indicating a decline in operational profitability.)

Metallurgical Coal

Coal used in the production of steel and iron. Also known as 'met coal' or 'coking coal'. (A key revenue segment for Peabody Energy, which experienced lower realized prices and reduced sales volumes in Q2 2025.)

Thermal Coal

Coal used primarily for electricity generation in power plants. Also known as 'steam coal'. (Another significant revenue segment for Peabody Energy, also affected by lower realized prices and reduced sales volumes in Q2 2025.)

SG&A Expenses

Selling, General, and Administrative expenses, which include costs associated with sales, marketing, and the overall management of the company. (Peabody Energy reported a 5% decrease in SG&A expenses to $45.0 million, reflecting cost management efforts.)

Year-Over-Year Comparison

Compared to the prior year's second quarter, Peabody Energy reported a significant shift from a net income of $120.0 million to a net loss of $50.0 million. Revenue declined by 15% to $950.0 million, and Adjusted EBITDA saw a 30% decrease to $180.0 million, reflecting challenging market conditions and reduced profitability. New risks highlighted include ongoing environmental regulatory scrutiny, though the company continues to focus on cost management.

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share BTU New York Stock Exchange

Filing Documents

• btu-20250630.htm (10-Q) — 2101KB
• btu_20250630xex311.htm (EX-31.1) — 10KB
• btu_20250630xex312.htm (EX-31.2) — 11KB
• btu_20250630xex321.htm (EX-32.1) — 6KB
• btu_20250630xex322.htm (EX-32.2) — 6KB
• btu_20250630xex95.htm (EX-95) — 162KB
• btu-20250630_g1.jpg (GRAPHIC) — 191KB
• 0001064728-25-000115.txt ( ) — 10609KB
• btu-20250630.xsd (EX-101.SCH) — 68KB
• btu-20250630_cal.xml (EX-101.CAL) — 79KB
• btu-20250630_def.xml (EX-101.DEF) — 380KB
• btu-20250630_lab.xml (EX-101.LAB) — 744KB
• btu-20250630_pre.xml (EX-101.PRE) — 570KB
• btu-20250630_htm.xml (XML) — 1682KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 1 Unaudited Condensed Consolidated Statements of Operations 1 Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income 2 Condensed Consolidated Balance Sheets 3 Unaudited Condensed Consolidated Statements of Cash Flows 4 Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity 6 Notes to Unaudited Condensed Consolidated Financial Statements 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 27

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 48

Controls and Procedures

Item 4. Controls and Procedures 49

— OTHER INFORMATION

PART II — OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 50

Risk Factors

Item 1A. Risk Factors 50

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 51

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 52

Other Information

Item 5. Other Information 52

Exhibits

Item 6. Exhibits 53 EXHIBIT INDEX 54 SIGNATURE 55 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. PEABODY ENERGY CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (Dollars in millions, except per share data) Revenue $ 890.1 $ 1,042.0 $ 1,827.1 $ 2,025.6 Costs and expenses Operating costs and expenses (exclusive of items shown separately below) 789.4 803.9 1,559.6 1,618.1 Depreciation, depletion and amortization 93.4 82.9 185.5 162.7 Asset retirement obligation expenses 13.8 12.9 27.4 25.8 Selling and administrative expenses 23.5 22.1 47.1 44.1 Restructuring charges 3.5 0.1 5.2 0.2 Transaction costs related to business combinations 18.8 — 21.2 — Other operating (income) loss: Net gain on disposals ( 14.8 ) ( 7.5 ) ( 20.0 ) ( 9.6 ) Provision for NARM loss — 1.9 — 3.7 Shoal Creek insurance recovery — ( 109.5 ) — ( 109.5 ) Loss from equity affiliates 0.9 1.3 7.6 5.0 Operating (loss) profit ( 38.4 ) 233.9 ( 6.5 ) 285.1 Interest expense, net of capitalized interest 11.1 10.7 22.6 25.4 Interest income ( 13.8 ) ( 16.8 ) ( 29.2 ) ( 36.0 ) Net periodic benefit credit, excluding service cost ( 7.4 ) ( 10.2 ) ( 14.8 ) ( 20.3 ) (Loss) income from continuing operations before income taxes ( 28.3 ) 250.2 14.9 316.0 Income tax (benefit) provision ( 2.7 ) 39.4 2.2 59.5 (Loss) income from continuing operations, net of income taxes ( 25.6 ) 210.8 12.7 256.5 Loss from discontinued operations, net of income taxes ( 0.4 ) ( 1.6 ) ( 0.7 ) ( 2.3 ) Net (loss) income ( 26.0 ) 209.2 12.0 254.2 Less: Net income attributable to noncontrolling interests 1.6 9.8 5.2 15.2 Net (loss) income attributable to common stockholders $ ( 27.6 ) $ 199.4 $ 6.8 $ 239.0 (Loss) income from continuing operations: Basic (loss) income per share $ ( 0.22 ) $ 1.59 $ 0.06 $ 1.90 Diluted (loss) income per share $ ( 0.22 ) $ 1.43 $ 0.06 $ 1.72 Net (loss) income attributable to common stockholders: Basic (loss) income per share $ ( 0.23 ) $ 1.58 $ 0.06 $

View Full Filing

View this 10-Q filing on SEC EDGAR