TORONTO (miningweekly.com) – Coal producer Peabody Energy’s stock on Tuesday took a beating amid negative investor sentiment towards the coal industry, shedding as much as 24% in morning trading despite reporting better-than-expected financial results for the three months ended September 30.

With about 26 operations in the US and in Australia, Peabody on Tuesday morning reported a net loss attributable to common stockholders of $304.7-million, or $16.73 a share, more than double the net loss reported for the comparable period a year earlier.

Excluding special items, the adjusted loss was $8.13 a share, beating average analyst forecasts of an adjusted loss of $8.38 on revenue of $1.4-billion.

Revenue in the period was $1.42-billion, an 18% contraction year-on-year as global coal markets continued to deteriorate.

Peabody benefited from the depreciated Australian dollar, with country-related costs declined from $52.48/t in the second quarter to $48.11/t in the third quarter. Costs also improved in the US segment, dropping from $15.27/t in the second quarter to $14.57/t in the third quarter.

Peabody's 2015 US production was fully priced with 2016 US production about 85% priced, based on assumed 2016 production levels, which were expected to be slightly below revised 2015 targets. Peabody now had 113-million tons of Powder River basin coal, priced at an average of $13.67/t for 2016 delivery.

After working with customers to defer shipments into 2016, the company managed to reduce 2015 US sales volumes by five-million tons. Australian costs a ton were now targeted to be nearly 25% below 2014 levels as a result of lower currency, fuel rates, productivity improvements and operational changes.

The company now expected to produce between 222-million tons and 237-million tons of coal this year, down from previous guidance of 225-million tons to 245-million tons.

Peabody also expected 2015 capital spending and selling, and administrative expenses to be about 25% lower than 2014 levels. The company now projected to spend between $140-million and $150-million this year, down from the previous guidance of $160-million to $170-million.

A number of cost-saving initiatives had been implemented to cope with the difficult coal market. During the third quarter, the company introduced a 1-for-15 reverse stock split, which about 90% of shareholders supported. Peabody started to trade on the NYSE at a stock-adjusted basis from October 1.

Some market observers believed that the company's current debt levels were unsustainable in the current environment. Peabody reported long-term debt of $6.28-billion, a problem it would have to deal with, or risk going down the same route as Walter Energy, Alpha Natural Resources and possibly Arch Coal. Walter Energy and Alpha Natural Resources went bankrupt, and Arch Coal was fighting an uphill battle to survive, after shareholders rejected a proposed debt swap.

Peabody noted that it was assessing potential avenues for deleveraging, including asset sales, a continued focus on cash outlays from cost or capital management, rising cash flow from any eventual market improvements and potential debt buy-backs or exchanges.

Peabody’s NYSE-listed stock had lost more than 85% of its value in the past year and on Tuesday changed hands at $17.15 apiece.