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CONSOL (CNX) Q4 Earnings: What's in Store for the Stock?

CONSOL Energy Inc.CNX is expected to report fourth-quarter 2016 results before the market opens on Jan 31. Last quarter, this coal and natural gas company reported a negative earnings surprise of 36.36%. On an average, the company has delivered a negative earnings surprise of 39.42% over the four trailing quarters. Let's find out what's in store in this quarter.

Factors to Consider

Even though President Trump's vow to revive the fossil fuel industry is expected to benefit coal miners, natural gas continues to pose tough completion on the back of its clean-burning nature and low prices.

During the quarter, CONSOL Energy decided to dissolve its joint venture with Noble Energy NBL in the Marcellus Shale properties. Post the closure of the joint venture, CONSOL Energy will own a 100% working interest in approximately 306,000 Marcellus acres with associated production of approximately 620 million cubic feet per day of natural gas equivalents. The majority of the acreage operated by CONSOL Energy is in Pennsylvania.

CONSOL Energy's E&P margins might improve a bit sequentially in the fourth quarter of 2016, courtesy of its hedging activities and cost-saving initiatives.

Earnings Whispers

Our proven model does not conclusively show that CONSOL Energy is likely to beat estimates this quarter as it does not have the right combination of the two key ingredients. Note that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) to be able to beat estimates. However, that is not the case here, as elaborated below.

CONSOL Energy Inc. Price and EPS Surprise

CONSOL Energy Inc. Price and EPS Surprise | CONSOL Energy Inc. Quote

Zacks ESP : CONSOL Energy has an Earnings ESP of -50.00% since the Most Accurate estimate is pegged at a loss of 3 cents while the Zacks Consensus Estimate stands at a loss of 2 cents.

Zacks Rank : Although CONSOL Energy's Zacks Rank #2 increases the predictive power of ESP, its negative ESP makes surprise prediction difficult.

Note that we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Price Movement

Over the last three months, CONSOL Energy has outperformed the Zacks categorized Coal industry. During this period, company's shares gained 14.55%, compared with the industry's increase of 6.0%.

Stocks to Consider

While CONSOL Energy failed to secure the required mix, here are a couple of coal companies looking up this earnings season.

Alliance Resource Partners L.P. ARLP is expected to release fourth-quarter 2016 results on Jan 30. The company has an Earnings ESP of +2.33% and a Zacks Rank #1. You can see the complete list of today's Zacks #1 Rank stocks here .

CNX Coal Resources LP CNXC has an Earnings ESP of +17.31% and a Zacks Rank #3. The company is expected to release fourth-quarter 2016 results on Jan 30.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

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CONSOL Energy Inc. (CNX): Free Stock Analysis Report

Alliance Resource Partners, L.P. (ARLP): Free Stock Analysis Report

Noble Energy Inc. (NBL): Free Stock Analysis Report

CNX Coal Resources LP (CNXC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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