Coal mining giant Peabody Energy Corp. (NYSE: BTU) has reported a net loss of $0.62 per share (after a $0.23 refinance charge) on revenues of $1.54 billion for its most recent quarter. Thomson Reuters had estimates of a net loss of $0.32 per share on $1.61 billion in revenues.

Adjusted EBITDA was $166 million. Peabody said that cost reductions largely offset $100 million in lower pricing in the first quarter. The company also signaled that its liquidity rose to $2.22 billion. Selling and administrative expenses declined 17% to $49.4 million.

The company is targeting an adjusted loss at $0.59 to $0.49 per share for the coming quarter. Thomson Reuters has an estimated net loss of $0.34 per share.

As far as what lies ahead for Peabody, the coal miner said that 2015 U.S. volume guidance would be reduced by 10 million tons. It also lowered U.S. and Australian costs per ton and capital targets to reflect success of ongoing initiatives. The company sees $685 million improvement in annual cash outlays by early 2017, related to potential currency and fuel benefits and expiration of PRB reserve and health trust payments.

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Additional actions being taken were summarized as follows:

• Operational: Maintaining a relentless focus on improving safety, increasing productivity and driving down operating costs.
• Selling, General and Administrative: Building on the 17% cost improvement in the first quarter, the company is targeting a leaner structure through office closures, process rationalization and overhead reductions.
• Financial: Maximizing cash and liquidity in the near term, and Peabody now has no significant debt maturities for more than three years.
• Portfolio: Initiating a heightened emphasis on portfolio optimization through asset sales and joint ventures, including sales of non-core reserves, surface lands and partial interests in active operations.

Peabody Energy President and CEO-Elect Glenn Kellow said:

In the face of market headwinds, Peabody’s first quarter performance demonstrates the underlying strength of our business as ongoing cost improvements largely overcame lower coal prices and the impact of hedging. While our team has made considerable strides in driving down costs, we know we have further work to do, and we are implementing a wide range of initiatives to provide sustainable results and generate shareholder value.

While global coal markets remained weak during the first quarter, thermal coal production curtailments are beginning to accelerate and seaborne metallurgical coal supply is expected to decline for the first time in three years. The impact of slowing Chinese demand has weighed on the market, yet we expect rising Indian coal imports, ongoing global urbanization trends and economic growth to lead to rising steel and electricity consumption over the next several years.

Ahead of earnings, 247 Wall St. asked if coal mining outfits could meet even the most modest of earnings expectations. As a reminder, Peabody is now expected to have operating losses for 2015 (-$1.31 per share) and 2016 (-$0.69 per share).

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Peabody shares closed up 1.25% at $4.87 on Wednesday, ahead of Thursday’s earnings report. Its stock was indicated up 1% at $4.92 in Thursday’s premarket indications, but as expect the real action came after the opening bell. Shares dropped nearly 6% to $4.58, before starting to recover.

Peabody has a 52-week range of $4.67 to $19.63, and a consensus analyst price target of almost $8.00. Keep in mind that Peabody is heavily shorted, and the last short interest was at a year-high of more than 65.5 million shares.

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