Consol Energy Inc. (CNX) posted earnings from continuing operations of 48 cents in the third quarter, lower than the Zacks Consensus Estimate of 64 cents and almost in line with 49 cents reported a year ago. The slight 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 7% to $1,094.5 million compared to $1,173.1 million a year ago. Revenue decline in the quarter is attributed to lower revenues in the metallurgical coal and gas segments, offset by an increase in thermal coal revenues.
Consol produced 0.6 million tons of metallurgical coal during the quarter versus 0.9 million tons in the year-earlier quarter. The average realized price in the quarter declined 17.6% from a year ago to $97.07 per ton. The company’s thermal coal production declined by 1.0 million tons from last year to 12.9 million tons, with the average price increasing 24% to $58.07 per ton in the quarter.
CNX Gas Corporation (CXG), 83.3% of which is owned by Consol Energy, reported a record production of 22.5 billion cubic feet (Bcf) in the quarter, up 20% from 18.8 Bcf produced a year ago. The average realized gas price declined $2.92 per Mcf to $6.71 per Mcf in the quarter.
At quarter end, Consol’s liquidity was $426.7 million, with cash of $31.4 million and $395.3 million of credit facility. Short-term debt was $336.9 million at quarter end. CNX Gas had $73.1 million of short-term debt and $113.0 million in liquidity, with $1.0 million of cash and $112.0 million of credit facility.
Consol Energy’s capital expenditures in the quarter were $192.7 million, with $49.3 million attributable to CNX Gas.
Guidance
Consol Energy retained its production target of 58 million tons for calendar year 2009, including 1.9 million tons of metallurgical coal. CNX Gas now expects to produce 89 Bcf of gas versus its previous guidance of 92 Bcf for calendar year 2009.
Consol expects to invest $1.0 billion in its coal and gas businesses during calendar year 2009. The company continues to monitor and evaluate capital spending to ensure adequate liquidity and preserve options for possible external investment.
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