CONSOL Energy Inc
) reported earnings of 43 cents per share for the fourth quarter
2012, surpassing the Zacks Consensus Estimate of 22 cents.
Earnings however were substantially lower than the year-ago
figure of 71 cents.
GAAP earnings during the quarter were 65 cents compared with
85 cents in the year-ago period, which included a pre-tax gain of
26 cents and a 4 cent pre-tax charge.
Adjusted earnings per share of $1.48 for 2012 were way below
the year-ago earnings of $2.76 per share but outpaced the Zacks
Consensus Estimate of 89 cents.
Earnings underperformed due to the stalemate in the U.S. coal
market in 2012 and weak natural gas prices in the fourth quarter
CONSOL Energy's quarterly revenue decreased 9.9% to $1.4
billion from $1.5 billion in the year-ago quarter. The
year-over-year decline was due to diminishing coal volume sales
compounded by a 5.1% reduction in the average sales price.
The top line easily beat of the Zacks Consensus Estimate of
CONSOL Energy's 2012 revenue also dropped 11.2% to $5.4
billion from $6.1 billion in 2011. For 2012, the top line
narrowly beat the Zacks Consensus Estimate of $5.3 billion.
Total costs during the quarter were down 8.7% year over year
to $1,190.5 million from $1,304.5 million in the year-ago
quarter. For 2012, costs decreased 7.4% to $4,933.03 million from
$5,329.2 million in 2011.
A fall in costs of goods sold, gas royalty charges and
purchased gas led to the overall shrink in expenses.
Operating income for the quarter declined markedly by 23.5%
year over year. Similarly net income for 2012 fell 38.6% from
2011 levels. The decline in operating income was on account of
greater plunge in revenue relative to the cost.
As of Dec 31, 2012, cash and cash equivalents were $21.8
million compared with $375.7 million as of Dec 31, 2011.
Total long-term debts at the end of 2012 stood at $3.17
billion, flat year over year.
Cash from operating activities at the end of 2012 was $0.72
billion versus $1.5 billion provided at the end of 2011.
For 2013, the company estimates net gas output in the range
170 to 180 billion cubic feet equivalent (Bcfe). First quarter
2013 gas volumes are expected to be in the range 39 Bcfe to 41
Bcfe. Projected coal sales volume for first quarter 2013 is 14
million tons while for 2013 the volumes are expected to be 56.3
High-vol met coal volume is expected to be 1.1 million tons
and 1.8 million tons in the first quarter 2013 and full year
2013, respectively. Low-vol met volume is expected to be 0.9
million tons in the first quarter 2013 and 3.9 million tons in
Thermal coal volumes are estimated to be 11.9 million tons in
the first quarter and 50.1 million tons in 2013. Total hedged gas
production is set at 17.0 Bcf for the first quarter 2013 at an
average price of $4.66 per thousand cubic feet (Mcf). CONSOL
Energy expects to export 5-10 million tons of coal in 2013.
Other Coal Company Releases
Peabody Energy Corporation
) reported an operating loss of $1.12 per share in the fourth
quarter, coming significantly below the Zacks Consensus Estimate
of earnings of 26 cents.
Alliance Resource Partners, L.P.
) reported earnings of $1.87 per unit in the fourth quarter,
surpassing the Zacks Consensus Estimate of $1.32 per unit for the
The rising demand for coal in the emerging markets of China
and India will boost the prospects of metallurgical coal exports
at CONSOL Energy. It is believed that domestic production in
these countries is not sufficient to meet the growing demand for
The company will also benefit from the promising prospects
offered by the Brazilian markets particularly with the
implementation of favorable monetary, fiscal and tax policies
that brought about an upside in steel utilization rates.
Moreover, normal winter weather and expected upswing in natural
gas prices could act as potential near-term positive triggers.
However, regulatory pressure and underground operational risk
are negatives that could undermine the growth opportunities.
Presently, the company carries a Zacks Rank #3 (Hold).
We currently have a Zacks Rank #2 (Buy)
Natural Resource Partners L.P.
), which is scheduled to release its fourth quarter earnings on
ALLIANCE RES (ARLP): Free Stock Analysis
PEABODY ENERGY (BTU): Free Stock Analysis
CONSOL ENERGY (CNX): Free Stock Analysis
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