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Will Soft Market Hit CNX Coal Resources (CNXC) Earnings?

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CNX Coal Resources LPCNXC will release third-quarter 2015 financial results after the market closes on Oct 26, 2015. The partnership started to trade on the exchange from Jul 1, 2015. Let's see how things are shaping up at CNX Coal prior to this announcement.

Factors to Consider

We expect the continuing weakness in coal prices to have an adverse impact on CNX Coal Resources' financial results. We remind investors that CNX Coal Resources is a thermal coal Master Limited Partnership ("MLP"), sponsored by CONSOL Energy CNX . The MLP owns 20% of CONSOL Energy's thermal coal and mining properties in Pennsylvania, including the Bailey Mine, Enlow Fork Mine, Harvey Mine and the related preparation plant.

The demand for coal is expected to drop further from the present level, thanks to the stringent Climate Action Plan, which will accentuate idling of more coal based power plants. CNX Coal Resources' otherwise high-yielding coal properties are expected to suffer from the broad-based downturn in the coal industry.

Earnings Whispers?

Our proven model does not conclusively show that CNX Coal Resources is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here.

Zacks ESP: CNX Coal Resources has an Earnings ESP of -7.41%. This is because the Most Accurate estimate is 50 cents while the Zacks Consensus Estimate stands at 54 cents.

Zacks Rank : CNX Coal Resources carries a Zacks Rank #3. The Zacks Rank #3 combined with a -7.41% makes an earnings beat unlikely this season.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

We have very few coal miners on our list worth recommending ahead of the third quarter earnings releases. Peabody Energy (BTU) however fits the bill with an earnings ESP of +1.79% and a Zacks Rank #3 (Hold).

We also bring into focus an electric utility poised for an earnings beat. Southern Company SO has an earnings ESP of +1.74% and carries a Zacks Rank #3 (Hold).

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CONSOL ENERGY (CNX): Free Stock Analysis Report

SOUTHERN CO (SO): Free Stock Analysis Report

PEABODY ENERGY (BTU): Free Stock Analysis Report

CNX COAL RESRCS (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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