Peabody Energy Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 29 July 2026: press release. Guidance figures: 9 raised, 3 lowered, 9 new, 7 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net loss widened on lower volumes: Net loss attributable to common stockholders was $(90.6) million, or $(0.74) per diluted share, against $(27.6) million, or $(0.23), a year earlier. Adjusted EBITDA was $24.0 million against $93.3 million. Source
• Seaborne Metallurgical posted an EBITDA loss: Seaborne Metallurgical Adjusted EBITDA was $(17.0) million, against $(7.0) million in the first quarter. Costs per ton rose to $155.08 from $141.72 as Centurion commissioning added costs. Source
• Powder River Basin EBITDA turned negative: Powder River Basin Adjusted EBITDA was $(7.1) million, against $23.7 million in the first quarter, on 16.4 million tons sold against 21.2 million. Source
• Annual sales target cut to 2.0-2.5 Mt: Full-year Centurion sales target is now 2.0 to 2.5 million tons, including 0.5 to 0.7 million tons in the third quarter. The prior quarter had 2.5 million tons for the full year. Source
• Full-year metallurgical costs raised: Full-year metallurgical costs are expected to rise by about $10 per ton, to a $130 to $145 range, from lower volumes and higher Centurion contract labor, materials and supply costs. Source
• Convertible notes refinanced: Peabody repurchased $241.2 million of 3.25% 2028 notes for $386.8 million cash, effectively repurchasing 5.0 million shares. An induced conversion expense of $17.2 million was recorded. Source
• Surety changes cut collateral: Revised surety arrangements reduced restricted cash and collateral by about $350 million, or 43 percent, leaving $459.8 million of restricted cash and collateral. Source

“While second quarter results reflected temporarily lower volumes and higher costs, we are already seeing those impacts mitigate across our operations.”

Peabody President and Chief Executive Officer Jim Grech

Guidance

What changed from last quarter

• Guidance raised: Full-year Seaborne Thermal volume increased by 200 thousand tons to a 12.7 million ton midpoint. Source
• Guidance raised: Full-year Seaborne Metallurgical cost range rose by about $10 per ton, attributed to lower volumes and Centurion costs. Source
• Guidance raised: PRB cost range increased by $0.25 per ton, attributed to lower first-half shipments. Source
• Guidance lowered: Full-year Seaborne Metallurgical volume range low end moved to 8.8 million tons from 9.3 million tons. Source
• Guidance lowered: Full-year Centurion sales target is now 2.0 to 2.5 million tons, against 2.5 million tons in the prior quarter. Source
• Guidance lowered: Expected full-year metallurgical pricing as a share of the premium index moved to 70 to 80 percent from about 80 percent. Source
• New guidance: Quarterly guidance by segment for the third quarter of 2026 was given. Source
• New: Revised U.S. and Australia surety arrangements cut reclamation cash collateral requirements by about $350 million. Source
• New: Issued $250 million of 0.5% 2031 convertible notes and bought a capped call with a $50.61 cap price. Source
• New: Revolving credit facility capacity was increased to $400 million. Source
• New: A U.S. Department of Energy grant was awarded for rare earth elements and critical minerals in the Powder River Basin. Source

Results and growth drivers

• Net loss widened on lower volumes: Net loss attributable to common stockholders was $(90.6) million, or $(0.74) per diluted share, against $(27.6) million, or $(0.23), a year earlier. Adjusted EBITDA was $24.0 million against $93.3 million. Source
• Revenue rose from first quarter: Revenue was $1,003.2 million, up from $973.3 million in the first quarter and $890.1 million a year earlier. Six-month revenue was $1,976.5 million. Source
• Operating costs rose on Centurion: Operating costs and expenses were $953.9 million, against $864.7 million in the first quarter, and the operating loss was $(105.4) million. Management linked the higher costs to lower volumes and Centurion commissioning. Source
• Second-half improvement expected: Management said it expects improved results in the second half as Centurion reaches targeted production rates. Source

Segments and regions

• Seaborne Thermal earnings rose on price: Seaborne Thermal Adjusted EBITDA was $52.1 million, against $48.5 million in the first quarter. Average realized prices were 12.4 percent higher than the first quarter. Source
• Seaborne Metallurgical posted an EBITDA loss: Seaborne Metallurgical Adjusted EBITDA was $(17.0) million, against $(7.0) million in the first quarter. Costs per ton rose to $155.08 from $141.72 as Centurion commissioning added costs. Source
• Metallurgical volume above expectations: Metallurgical sales volume exceeded expectations by 0.2 million tons, from higher volumes at Metropolitan and the CMJV. Realized pricing rose 7.1 percent quarter over quarter to $148.04 per ton. Source
• Powder River Basin EBITDA turned negative: Powder River Basin Adjusted EBITDA was $(7.1) million, against $23.7 million in the first quarter, on 16.4 million tons sold against 21.2 million. Source
• Other U.S. Thermal volume below expectations: Other U.S. Thermal Adjusted EBITDA was $26.9 million, against $37.8 million in the first quarter. Sales of 3.0 million tons were 0.4 million tons below expectations, with rail outages after end-of-quarter rain. Source

“We expect improved results in the second half of the year as performance at our flagship Centurion Mine achieves targeted production rates,”

Peabody President and Chief Executive Officer Jim Grech

Centurion mine ramp

• Commissioning progress made in quarter: Management said Centurion made commissioning progress during the quarter, with operational constraints significantly reduced. Focus is now on achieving targeted production rates. Source
• Roof control issues still being worked: Remaining roof control issues are linked to a limited rock fault zone. The operating team has processes in place to address face conditions while maintaining production momentum. Source
• Annual sales target cut to 2.0-2.5 Mt: Full-year Centurion sales target is now 2.0 to 2.5 million tons, including 0.5 to 0.7 million tons in the third quarter. The prior quarter had 2.5 million tons for the full year. Source
• Centurion costs expected to ease: Management expects Centurion costs to trend more in line with expectations as production volumes increase. Source

Costs, margins and pricing

• Other U.S. Thermal costs in line: Other U.S. Thermal costs were $46.13 per ton, in line with guidance. Seaborne Thermal costs were $57.93 per ton, at the low end of guidance. Source
• Powder River costs rose on lower volumes: PRB costs were $14.06 per ton, against $12.53 in the first quarter. The fleet was kept fully utilized to uncover coal ahead of expected second-half volumes. Source
• Full-year metallurgical costs raised: Full-year metallurgical costs are expected to rise by about $10 per ton, to a $130 to $145 range, from lower volumes and higher Centurion contract labor, materials and supply costs. Source
• Export prices rose to $95.87: Export realized price averaged $95.87 per ton, against $86.25 in the first quarter. Domestic realized price was $36.69, against $32.62. Source

“Together, these actions unlock shareholder value, jump start shareholder returns, lower borrowing costs and increase financial flexibility.”

Executive Vice President and Chief Financial Officer Mark Spurbeck

Demand and order book

• Metallurgical pricing supported by China: Realized metallurgical pricing rose 7.1 percent quarter over quarter to $148.04 per ton. Management attributed the rise to growing supply constraints in China. Source
• Unpriced thermal tons remain: Third-quarter Seaborne Thermal volume includes 1.1 million tons of Newcastle product and 0.8 million tons of high ash product that are unpriced. About half of unpriced export volume is expected to price near NEWC levels. Source
• Metallurgical third-quarter volume to fall: Third-quarter metallurgical volume is expected to decline from the second quarter, due to a longwall move at Metropolitan and a lock outage at Shoal Creek. Source

Capital, cash and shareholder returns

• Liquidity and cash position: Cash was $526.3 million at June 30, 2026, and total liquidity was $959.1 million. Restricted cash and collateral fell to $459.8 million from $844.1 million at year-end. Source
• Convertible notes refinanced: Peabody repurchased $241.2 million of 3.25% 2028 notes for $386.8 million cash, effectively repurchasing 5.0 million shares. An induced conversion expense of $17.2 million was recorded. Source
• Surety changes cut collateral: Revised surety arrangements reduced restricted cash and collateral by about $350 million, or 43 percent, leaving $459.8 million of restricted cash and collateral. Source
• Further repurchases under evaluation: Management intends to evaluate additional 2028 convertible note and share repurchases under its shareholder return policy. Source
• Quarterly dividend of $0.075 declared: A quarterly dividend of $0.075 per share was declared, with payment on September 3, 2026 to holders of record on August 12, 2026. Source

Strategy and investment

• Federal grant for rare earths: The company was awarded a U.S. Department of Energy grant to advance rare earth elements and critical minerals development in the Powder River Basin. Source
• State grant earlier this year: Management said the Department of Energy grant adds to the Wyoming Energy Authority grant awarded earlier this year, as rare earth and critical mineral work continued. Source
• Full-year capital spending plan: Full-year 2026 total capital expenditures are guided at $340 million, unchanged from the prior quarter; second-quarter additions to property and mine development were $58.4 million. Source

Coming up, as management said on 29 July 2026

• Centurion second-half sales target: Centurion sales are targeted at 1.5 to 2.0 million tons in the second half of 2026. Source
• Powder River Basin third-quarter step-up: Third-quarter PRB volume is expected at 22 million tons, at an average price of $13.60 per ton. Source

Figures management reported

Risks management discussed

• Operational: Centurion is still working through roof control issues linked to a limited rock fault zone, which bears on the ramp to targeted production. Source
• Operational: Other U.S. Thermal sales were affected by rail outages after end-of-quarter rain, and volume came in below expectations. Source
• Demand: Milder weather and longer plant maintenance downtime reduced PRB sales below targeted levels in the quarter. Source
• Operational: Full-year metallurgical costs are higher on lower volumes and elevated contract labor, materials and supply costs at Centurion. Source

Earlier plans management reported on

• Not stated: The earlier plan for second-quarter commissioning completion and second-half full longwall rates was not restated; the current Centurion annual sales target is 2.0 to 2.5 million tons.
• Not stated: Second-quarter Other U.S. Thermal volume came in below the 3.4 million tons expected in the prior quarter, at 3.0 million tons. Source
• Met: Other U.S. Thermal costs of $46.13 per ton were stated as in line with guidance. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.