Consolidated Energy Earnings Fall On Lower Coal Sales Volumes
NEW YORK -(Dow Jones)- Consol Energy Inc. (CNX) reported a drop in third-
quarter earnings as margins improved, but sales volumes fell amid record coal
stockpiles at U.S. power plants.
The Pittsburgh company reported earnings of $87.4 million, or 48 cents a
share, down from $90.1 million, or 49 cents a share, a year earlier. Revenue
fell 7% to $1.09 billion.
Analysts surveyed by Thomson Reuters expected per-share earnings of 66 cents
on revenue of $1.1 billion.
U.S. coal producers have been struggling with a supply glut for thermal coal
amid recession-weakened power demand and increased use of natural gas-fired
power plants that have displaced coal-fired plants. The industry has started to
see a rebound in demand for metallurgical coal used in steel production driven
by China.
Sales volumes for thermal coal were down 10% to 13 million tons. The company
saw operating margins climb 77% as the average realized price per ton rose to $
58.07 from $46.75 on contracts signed in prior years. Metallurgical coal sales
volumes and operating margins dropped from a year ago, but the company said a
stronger market enabled it to produce more than expected.
As for the remainder of the year and 2010, the company said it expects the
high inventories to weigh on the thermal coal market until at the least the
first half of next year. But when the market tightens, it will happen quickly in
part because of the production cuts over the last year.
"With regard to the economic outlook, our best indicators are our own
inventories," Consol Chief Executive J. Brett Harvey said in a press release. "
We will not overproduce if markets remain weak."
CNX Gas Corp. (CXG) reported net income attributable to shareholders of $35.5
million for the third quarter, down from $67.4 million a year earlier. Consol
Energy owns 83% of the natural-gas production company.
Consol shares were down 3.1% to $49.50 premarket.
-By Mark Peters, Dow Jones Newswires; 212-416-2457; mark.peters@dowjones.com
(END) Dow Jones Newswires
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