Peabody Energy Corporation (BTU) Cash Flow Statement

The OCF-to-net-income ratio swings between extreme values, including -3.51 and 22.25, which indicates that quarterly net income is too noisy to serve as a reliable anchor for earnings quality. The persistent gap in 2026Q2 and 2025Q4 suggests that operating cash generation is being supported by working capital releases and non-cash add-backs rather than by durable margin strength. Investors should monitor whether this cash generation recurs once reclamation spending and working capital normalize.

Across the reported quarters, FCF margins range from roughly -10% to +25%, indicating that the cash profile is driven by timing and commodity pricing rather than a stable earnings base. The latest negative print appears to reflect operating cash flow of only -$1.4M against CapEx of $59.8M, which warrants further investigation into whether this is seasonal or structural. Relative to the peer set, where HCC maintains a 7.1% FCF margin, BTU's trajectory appears weaker and less consistent.

The elevated CapEx-to-revenue ratio is consistent with a capital-intensive surface mining model where equipment replacement and development at the North Antelope Rochelle Mine consume a large share of cash. Reported CapEx is high relative to D&A of roughly $94M to $123M per quarter in several periods, which may indicate spending that exceeds maintenance needs and supports growth initiatives such as Centurion. Whether this investment yields adequate returns remains unproven based on the supplied figures.

The magnitude of these swings relative to operating cash flow suggests that reported OCF in several quarters reflects working capital reversals rather than underlying earnings power. A large release in 2025Q3 followed by a reversal in 2026Q1 may signal lumpy seaborne shipment timing, consistent with revenue recognition at loading. Investors should treat single-quarter cash flow figures with caution until the trend stabilizes.

The cumulative gap appears driven by large non-cash items including depreciation and reclamation-related charges, which may overstate the economic cost of earnings reported on a GAAP basis. However, the same gap also means that cash generation has been partly consumed by acquisitions and capital spending, as evidenced by -$586.0M and -$432.1M acquisition outflows in 2025. This pattern warrants further investigation into the true sustainable cash yield of the business.