For the period ended June 30, the producer reported revenues of $1.73 billion, down 13% on a drop in pricing. Declines in Australian prices were offset in part by a 5% rise in volumes, though US revenues of $970.9 million felt the year-on-year impact of the pricing slump along with a larger percentage of western US shipments.

Australian sales totaled 8.6 million tons, including 4.1Mt metallurgical coal and 2.6Mt of seaborne thermal coal.

Peabody’s income from continuing operations was $101.4 million, down more than 50% from $214.5 million in the prior year on lower gross margins and higher depreciation, depletion and amortization expenses, though officials noted that the result was offset by a tax benefit.

On a positive note, the Missouri producer said its adjustments played a part in debt reduction of more than $100 million. Peabody had an ending cash balance on June 30 of $517.9 million.

Overall, its aggressive plan for cost containment provided for a 6% reduction in costs both in the US an in Australia.

“The strength of Peabody's global platform and the significant progress of our cost containment actions helped us overcome a number of challenges during the quarter," chairman and CEO Gregory Boyce said.

"Our progress in reducing capital and moving our operations down the cost curve highlights the actions we are taking to succeed in all market conditions.

“Peabody continues to drive improvements across our platform, which remains very well positioned with competitive assets in the growth regions of the United States and Australia."

Looking at the global picture, the miner said seaborne thermal demand – of which some of its output would be included – would go up in 2013 by approximately 50 million tons thanks to the addition of about 75 gigawatts of new coal generation coming online.

Between 2012 and 2017, that growth should hit 1.2Bt on 425GW of new coal generation.

Most of Peabody’s Australian metallurgical coal production should be settled in line with quarterly or monthly benchmarks, officials said, and about 40% of it would be sold on a shorter-term basis.

Whole year, Peabody is hoping for Australian sales of 33 to 36Mt, including 15 to 16Mt of met output and 11 to 12Mt of export thermal coal.

Looking at the domestic market, the company said coal-fired generation was on the rise due to a decline in natural gas use and, combined with reduced coal production, the nation’s coal inventories were expected to be at their lowest levels in several years with Powder River Basin stockpiles leading the decline.

The company estimated that whole-year coal consumption in the US for electricity generation would increase by 50 to 70Mt year-on-year. It said demand for coal had already gone up 11% in the first half of the year – now accounting for 40% of total electricity generation.

Coal shipments were also down 5% through June, leaving utilities with an above-average stockpile drawdown.

Longer term, Peabody said it expected US coal consumption of PRB and Illinois Basin coal to continue to increase on higher coal plant utilization and basin switching.

Its production from the US is essentially fully priced for the year, and 2014 sales are at about 70-80% based on comparable 2013 production levels.

“Peabody continues to be focused on cost containment and tight capital discipline,” Boyce noted in what was a theme in the company’s earnings call, and those changes are going to continue.

“Peabody is reducing 2013 Australian cost targets to the mid-$70 per ton range, with 2013 US costs per ton expected to be 2 -3% lower than last year.”

Some of those cost reduction initiatives have included savings from multiple owner-operator conversions in Australia as well as productivity improvements at its PCI operations, a drop in contractors, temporary labor and overtime to streamline operations, and efforts across the supply chain to reduce costs of materials and supplies.

Capital spending continues to be tightly managed, officials said, and Peabody had reduced 2013 capital targets by $100 million to $350 to $450 million.

Looking ahead to the remainder of the year, Peabody’s targets for 2013 include total sales of 230 to 250Mt, 180 to 190Mt in the US and 33 to 36Mt in Australia. US revenues per ton will be about 5-10% below last year.