Coal producer CONSOL Energy Inc. (CNX) posted earnings from continuing operations of 78 cents per share in the fourth quarter, higher than the Zacks Consensus Estimate of 74 cents but below the 97 cents reported a year ago. The better-than-expected results came on the back of increased thermal coal realizations, while the decrease versus last year was due to lower thermal coal production, lower metallurgical coal production and lower gas prices. 

Net revenue in the quarter decreased marginally (by 0.47%) to $1,238.0 million compared to $1,242.7 million a year ago. The slight revenue decline in the quarter is attributed to lower sales in the metallurgical coal and gas segments, almost offset by an increase in thermal coal revenues. 

CONSOL produced 0.9 million tons of metallurgical coal during the quarter versus 1.2 million tons in the year-earlier quarter. The average realized price in the quarter declined 12.0% from a year ago to $108.24 per ton. The company’s thermal coal production declined by 1.6 million tons from last year to 14.6 million tons, with the average price increasing 16.5% to $54.17 per ton in the quarter. 

CNX Gas Corporation (CXG), 83.3% of which is owned by CONSOL Energy, reported a record production of 25.1 billion cubic feet (Bcf) in the quarter, up 13.1% from 22.2 Bcf produced a year ago. The average realized gas price declined $1.88 per Mcf to $6.47 per Mcf in the quarter. 

At quarter end, CONSOL’s liquidity was $482.1 million, with cash of $64.5 million, $101.0 million of accounts receivable securitization facility and $316.6 million of credit facility. CNX Gas had $57.8 million of short-term debt and $128.4 million in liquidity, with $1.1 million of cash and $127.3 million of credit facility. 

CONSOL Energy’s capital expenditures in the quarter were $231.0 million, with $63.4 million attributable to CNX Gas.
 
Guidance 

CONSOL Energy is targeting to produce 56 million tons of thermal coal for calendar year 2010 (to supply domestic customer demand and thermal coal exports). CNX Gas retained its production guidance of 100 Bcf of gas for calendar year 2010. 

CONSOL expects to invest $1.0 billion in its coal and gas businesses during calendar year 2010. Of this, $500 million will be allocated for coal operations, $400 million for CNX Gas, and $100 million for other (non-gas) activities.
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