March quarter EBITDA of $109.8 million, a 13% increase on 2003, and revenues of $788.6 million outstripped initial expectations by the company.

Sales volume rose 8% and revenues per ton increased 6%, driven by higher demand from U.S. electricity, steel and export customers.

Peabody posted a record first quarter sales volume of 51.9 million tons and shipments from Appalachia increased 650,000 tones, or 19%, as its 29 operations performed above or near 2003 levels.

Eastern U.S. higher first quarter revenues overcame approximately $1.50 per ton in increased costs, resulting from upgrading steam coal to metallurgical quality, increased diesel fuel and steel expenses, a change of mix to higher margin products, and the timing of substitute coal purchases to enable future production to be sold in higher-value markets.

Captial expenditure totaled $24.4 million. This year’s capital expenditures is targeted between $280 million to $300 million, including capital related to the new operations in Australia and Colorado.

Peabody forecast production of between 200 to 205 million tons, with total sales volumes of 220 to 230 million tons.

“Management expects strong market conditions and recent acquisitions to overcome external cost pressures, the effects of rail performance and the upgrade of handling facilities at a Powder River Basin mine,” said Peabody.

The company has targeted second quarter EBITDA of $120 million to $130 million and earnings per share of $0.35 to $0.5.