Consol first quarter loss narrows
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CANONSBURG – Consol Energy Inc. Tuesday reported a loss of $39 million in its first quarter.
On a per-share basis, the Southpointe-based company said it had a loss of 17 cents. Earnings, adjusted for asset impairment costs, came to 17 cents per share.
The first-quarter loss was well below the $96.7 million loss the company posted for the comparable period of a year ago.
The results beat Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 11 cents per share.
The natural gas company posted revenue of $698.7 million in the period, which also beat Street forecasts. Three analysts surveyed by Zacks expected $644.1 million.
Most of loss reported on Tuesday was because of an impairment charge from the sale of the company’s Knox Energy LLC and Coalfield Pipeline Co. subsidiaries.
The sale of non-core assets is a part of the company’s strategy for improving its share price, said CEO Nick DeIuliis.
“During the quarter, substantial progress was achieved on three important drivers of net asset value per share,” DeIuliis said.
“First, for E&P, cycle times are down, capital efficiencies are up, and well type curves are further optimized, resulting in production guidance increases in 2017 and 2018 without any increases to last quarter’s previously announced capital budgets.
“Second, our asset sales program is in high gear, and we monetized over $100 million to date and expect to be over halfway to the high end of our $400-$600 million asset sales target by the end of the second quarter. Third, the company generated approximately $100 million in organic free cash flow from continuing operations, which excludes asset sales, in the first quarter and used that organic free cash flow to purchase our debt at a discount and reduce interest expense.”
During a conference call, DeIuliis and other Consol executives also discussed the company’s transition from the Marcellus to sites in the Utica Shale dry gas in Monroe County, Ohio, where it sees the strata becoming a larger part of its output as production costs decrease.
Consol shares have decreased 15 percent since the beginning of the year, while the Standard & Poor’s 500 index has increased nearly 7 percent. The stock has climbed 3 percent in the last 12 months.