ST. LOUIS - Peabody Energy Corp. said Tuesday its third-quarter profits plunged 71 percent as cooler weather and cheap natural gas curtailed coal-fired power generation. But the performance soundly topped expectations and the company offered a rosier production outlook.

That outlook isn't being driven by a better economic climate in the U.S. Peabody is moving quickly to pull more coal from its Australian mines to satisfy a couple of customers still buying a lot of coal: China and India.

China imported 21 million tons of metallurgical coal used for steelmaking through August - according to Peabody, 10 times last year's pace. India reports it may be up to 200 million tons short of coal per year by 2014

Rising steel production in both countries has stoked an appetite for coal, said Gregory Boyce, Peabody's chairman and chief executive.

For Peabody and other miners, Australia is key to tapping the Chinese market. A year after sending 1.1 million tons of coal to China, that figure has reached 14.5 million tons.

It's a different story in the U.S.

Electricity generated by coal has dipped 10 percent this year to date, partly because of the recession, but also because natural gas has become so cheap. Power providers can switch to natural gas when prices fall.

And the summer was exceptionally cool, meaning more open windows at home and less use of air conditioners.

That has only hastened the company's shift to Asia.

Peabody created a trading hub in Singapore during the quarter.

"China's growth will continue, and now that other countries in the Pacific Rim have returned to their high pre-recession growth rates for coal, we are seeing demand again stretching supply," Boyce told analysts in a conference call.

Peabody expects global demand for coal shipped by sea to grow by 300 million to 400 million tons per year.

Peabody, whose coal fuels roughly one-tenth of all U.S. electricity generation and more than 2 percent of worldwide electricity, said it earned $106.8 million, or 40 cents per share, in the July-through-September period. That compared with $369.5 million, or $1.35 a share, a year ago.

Analysts polled by Thomson Reuters expect, on average, third-quarter earnings per share of 22 cents and revenue of $1.42 billion.

Peabody shares rose 44 cents to $43.81.

Peabody raised the lower end of its production outlook for the year to 235 million to 245 million tons, up from its July forecast of 225 million to 245 million tons. Boyce said the company intends to double its exports of Australian coal over the next five years.

Peabody's earnings are closely watched because the company usually is the first of the sector's big players to report each quarter, giving analysts a snapshot of the industry's health.

Peabody's third-quarter revenue rose to 1.67 billion on sales of 63.5 million tons of coal, down from $1.9 billion and 65.6 million tons a year ago.

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