One of the main ideas in the Coal Stocks portfolio is Peabody Energy (BTU) who recently reported 2008 fourth quarter earnings that exceeded Wall Street’s expectations as the company reported net income of $293.3 million, or $1.1 per share in the 4th quarter, up from $35.6 million or $0.13 cents per share a year earlier. Revenue in the most recent quarter rose a whopping 61% to $1.9 billion from $1.2 billion. For the year, Peabody’s revenue is up 40%, EBITDA is up 85%, operating profit up 128%, earnings per share (EPS) is up 188%, and cash flow is up 48% Currently, Peabody has a $1 billion dollar stock buyback in place, which equates to about 17% of total shares outstanding

Another interesting idea are shares of Arch Coal (ACI) which just missed 2008 fourth quarter earnings expectations after reporting earnings per share of $0.44 cents versus Wall Street estimates of $0.56 cents per share. Net income for the quarter was $65.3 million, compared with $81.4 million a year ago. Arch Coal reported total revenue of $729.9 million in fourth quarter, up 13% from revenue of $644.4 million a year ago. For the full year 2008, Arch Coal reported record net income of $354.3 million, or $2.45 per share, compared with $174.9 million, or $1.21 per share. For 2009, Arch gave forecast sales volumes of 120 million to 127 million tons for 2009, down from 137.8 million tons in 2008

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