0001064728-26-000025
SEC filingPeabody's Q1 2026 Adjusted EBITDA fell 43% YoY to $82.5M, driven by Seaborne Metallurgical losses and higher costs.
For the three months ended March 31, 2026, Peabody reported total revenue of $973.3 million, a 4% increase from $937.0 million in the prior-year period. The increase was driven by favorable volume and mix variances, particularly in the Seaborne Metallurgical segment (+$62.9 million) and Powder River Basin (+$13.9 million), partially offset by a decline in Seaborne Thermal revenue (-$67.6 million). Despite higher revenue, net loss from continuing operations was $25.4 million, compared to income of $38.3 million in Q1 2025, a $63.7 million decline. The primary drivers were a $94.5 million increase in operating costs and expenses and a $17.4 million increase in depreciation, depletion and amortization. Adjusted EBITDA fell 43% to $82.5 million from $144.0 million, reflecting margin compression across most segments. Diluted EPS from continuing operations was -$0.26, compared to $0.27 in the prior year.
Seaborne Thermal: Revenue decreased 25% to $197.5 million, driven by a 32% drop in tons sold (3.0 million vs. 4.4 million) due to mine sequencing at Wilpinjong and the closure of Wambo Underground. Segment Adjusted EBITDA fell 42% to $48.5 million, with costs per ton rising 21% to $50.26.
Seaborne Metallurgical: Revenue increased 29% to $283.0 million on 11% higher volume (2.0 million tons) and 10% higher realized prices ($138.28/ton). However, segment costs surged 40% to $290.0 million, driven by higher labor, repairs and outside services costs ($63.2 million) from challenging longwall commissioning at the Centurion Mine. This resulted in a segment Adjusted EBITDA loss of $7.0 million, compared to a $13.2 million profit in Q1 2025.
Powder River Basin: Revenue rose 5% to $289.5 million on 8% higher volume (21.2 million tons), but realized prices fell 3% to $13.65/ton due to the federal royalty rate reduction under the OBBBA. Segment Adjusted EBITDA decreased 35% to $23.7 million, as higher costs for labor, repairs and outside services ($22.6 million) and commodities ($12.2 million) offset volume gains.
Other U.S. Thermal: Revenue increased 9% to $184.5 million on 6% higher volume (3.3 million tons) and 3% higher realized prices ($55.79/ton). Segment Adjusted EBITDA rose 15% to $37.8 million, driven by higher realized prices net of sales sensitive costs.
Management expects the Centurion Mine to complete commissioning and production ramp-up in the second quarter of 2026, with full longwall production rates anticipated in the second half of 2026. The seaborne metallurgical coal market is expected to remain volatile, influenced by mining rates in Australia, geopolitical events, Chinese supply reforms and Indian steel industry growth. Seaborne thermal coal prices may remain volatile due to accessibility to shipping in the Strait of Hormuz and the duration of the Middle East conflict. In the U.S., coal's share of electricity generation decreased to approximately 16% in Q1 2026, while wind and solar combined reached 20%. The company is advancing evaluation of rare earth elements recovery and continues to pursue federal and state funding pathways.
Cash and equivalents stood at $492.5M as of March 31, 2026, down from $575.3M at year-end 2025, a decrease of $82.8M. Total debt (net carrying) was $335.2M, slightly down from $336.4M. Shareholders' equity was $3,540.1M. Inventory increased to $405.5M from $383.2M, driven by higher saleable coal inventory ($154.2M vs $126.0M). Restricted cash and collateral totaled $811.3M, including $675.9M in restricted cash.
As of March 31, 2026, the company had $51.9M in purchase commitments for capital expenditures, all due within the next 12 months. No other material changes to commitments were noted. Off-balance-sheet instruments included $1,079.6M in obligations supported by surety bonds and letters of credit, primarily for reclamation bonding.
Dividends: $9.2M paid ($0.075 per share quarterly), unchanged YoY. Share repurchases: $3.3M for employee tax withholding, no open market buybacks. Debt: net decrease of $1.2M, with $2.4M repaid. Capex: $85.4M (8.8% of revenue), up from $70.4M in Q1 2025, with Seaborne Metallurgical segment accounting for $55.0M.
The company reports four segments: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, and Other U.S. Thermal. Total segment revenue was $954.5M, down 2.6% from $929.5M. Seaborne Metallurgical grew 28.6% to $283.0M, while Seaborne Thermal fell 25.5% to $197.5M. Powder River Basin and Other U.S. Thermal posted modest gains. Adjusted EBITDA from segments fell to $103.0M from $166.6M, driven by Seaborne Thermal ($48.5M) and Other U.S. Thermal ($37.8M) partially offset by Seaborne Metallurgical loss of $7.0M. Geographic mix within segments: Seaborne Thermal revenue derived from export ($161.8M) and domestic ($35.5M); Seaborne Metallurgical entirely export ($282.3M); Powder River Basin and Other U.S. Thermal entirely domestic.
Peabody's operating cash flow (CFO) of $30.0M in Q1 2027 was significantly lower than the prior-year period ($119.9M), despite a net loss from continuing operations of $25.4M (vs. income of $38.3M in Q1 2026). The primary driver of the decline was a large unfavorable swing in working capital: accounts receivable provided $11.9M (down from $84.5M), other current assets swung to a use of $12.7M (from a source of $37.4M), and accounts payable/accrued expenses were a modest use of $3.1M (compared to a large use of $89.7M in the prior year). Noncash add-backs (depreciation, depletion, and amortization of $109.5M) and deferred tax benefits ($22.8M) partially offset the net loss.
Capital expenditures (additions to PP&E and mine development plus changes in accrued expenses) totaled $122.5M, up from $109.0M in the prior year. This resulted in negative free cash flow (FCF) of $92.5M, compared to positive FCF of $10.9M in Q1 2026. The negative FCF was insufficient to cover capital returns of $12.5M (dividends of $9.2M plus share repurchases of $3.3M). The company also made net contributions to joint ventures of $5.4M (contributions of $165.6M less distributions of $160.2M). Overall, cash generation weakened materially, with CFO covering only 24% of capex, and the company relied on its beginning cash balance to fund operations and investments.