Recently, Peabody has not been very profitable; in a time where prices are high due to undercapacity, Peabody should be very profitable, so its less than stellar success may be an indicator that its performance during industry downturns could be alarming.
Government environmental regulations, if continued, could put a cap on the amount of coal possible for Peabody to sell, as well as create conditions for higher-cost coal production and lower profit margins.
Commodity cycles make coal prices largely out of Peabody's hands; even costs are difficult to control, due to the commoditized nature of Peabody's inputs. Thus, there is a degree of luck to how the company's profit margins swing.