Consol earnings exceed forecasts
Consol Energy Inc. on Tuesday reported second-quarter net income of $169.5 million, after reporting a loss in the same period a year earlier.
The Southpointe-based company said it had profit of 73 cents per share. Earnings, adjusted for nonrecurring gains, came to 17 cents per share.
The results exceeded Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 10 cents per share.
The natural gas company posted revenue of $866 million in the period, also exceeding forecasts. Three analysts surveyed by Zacks expected $673.3 million.
Total revenue was also $581.9 million higher than $285.9 million recorded in the year-ago period. The year-over-year increase was due to higher contribution from mining operations, the company’s natural gas division and a gain on sale of assets, which so far this year total $345 million.
Consol’s Pennsylvania operations sold 6.8 million tons of coal in the second quarter compared with 6.2 million tons in the year-ago period.
Total cost of coal sold was $34.79 per ton, higher than $34.46 in the year-ago quarter due to additional equipment maintenance.
Total sales price per ton was $44.75 compared with $40.61 in the prior-year quarter. Thanks to improvement in sales price, average margin per ton sold in the reported quarter was $9.96 compared with $6.15 per ton in the year-ago quarter.
Consol’s gas division registered a 7 percent year-over-year reduction in gas sales volumes to 92.2 billion cubic feet equivalent in second-quarter 2017. The decline was primarily due to timing delays associated with the TIL schedule.
The average sales price of $2.47 per thousand cubic feet gas equivalent, when combined with unit costs of $2.20 per Mcfe, resulted in a margin of 27 cents per Mcfe, as compared with cents per Mcfe a year ago.
On Tuesday, Consol reiterated its 2017 E&P Division production to the range of 420-440 Bcfe. It raised its 2017 E&P capital expenditure in the range of $620-$645 million, up from the previous guidance of $555 million.
The company said it is now “100 percent focused” on a spin-off of its coal division. In July, it said it filed a registration statement with the U.S. Securities and Exchange Commission that it plans to separate its coal and natural gas companies. Consol said it will separate the company into a coal company and a natural gas exploration and production company.
Consol shares have declined 8 percent since the beginning of the year, while the Standard & Poor’s 500 index has risen 10 percent. The stock has declined 14 percent in the last 12 months.