The Australian thermal segment earned the top spot in operating results in the September quarter with 48% adjusted earnings before interest tax depreciation and amortisation margins.
Peabody averaged 28% margins across its five mining segments in the US and Australia in September.
The Australian thermal coal segment's expanded margins resulted from a 23% increase in the realised price per tonne while unit cost held largely flat, Peabody chief financial officer Amy Schwetz said in an analysts' call.
"This segment also led the company in total adjusted EBITDA of US$145 (A$201) million in the third quarter, some $48 million more than the prior period," she said.
"I'll mention that expected 2018 thermal sales volumes are not indicative of our typical run rate and we would expect to see higher volumes in 2019. The significant divergence that we noted in July between the 6000 and 5500 quality Newcastle thermal products continued throughout the [third] quarter."
Schwetz said that during the third quarter, the 6000-spec spot price rose 13% from the second quarter of 2018 to approximately $117 per metric tonne while the 5500 quality thermal product eased $6 to an average of $69/t.
"Despite this widening in the spread, Peabody saw realisations compared to the Newcastle index improve to the highest percentage of the year," she said.
"This occurred even with some 70% of thermal volumes in the quarter having been previously priced at lower amounts.
"Even the healthy Japanese fiscal year settlement in the quarter of $110/t was only 95% of the average pricing for the third quarter. We would expect our average realisations to hold in the mid-80% range of Newcastle quality for the fourth quarter."