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CNX Coal (CNXC) Q3 Earnings Miss Estimates, Revenues Beat

CNX Coal Resources LP’s CNXC third-quarter 2017 adjusted earnings of 7cents per unit missed the Zacks Consensus Estimate of 42 cents by a significant 83.3%. Further, the quarter’s earnings were also down 66.7% year over year.

Revenues

CNX Coal’s total revenuessurged 12.2% year over year to $78.3 million from the year-ago figure of around $69.8 million. Reported revenues also topped the Zacks Consensus Estimate of $76 million by 3%.

Operational Highlights

Average cost of coal sales per ton in the reported quarter was $37.32, 4.3% higher than the year-ago figure of $35.79.

Total cost of coal sold increased to $59 million during the third quarter, compared with $54.1 million during the year-ago quarter, driven primarily by one month of idle time at one Bailey longwall and higher-than-expected costs at Enlow Fork.

Average revenuesper ton sold in the quarter also was $44.16, 0.32% lower than the year-ago figure of $44.30.

Average cash margin per ton sold declined by 11.9% compared withthe year-ago quarter chiefly due to higher average cost of coal sold.

The partnership’s adjusted earnings before interest, tax, depreciation & amortization (EBITDA) in the quarter were $18.5 million, down by almost 5.1% from $19.5 million in the prior-year quarter.

Selling, general and administrative expenses for the quarter were approximately $4.3 million compared with $2.7 million for the year-ago period. The increase was largely driven by expenses related to organizational restructuring.

Total costs were $75.7 million, 19.4% higher than $63.4 million a year ago.

Financial Update

As of Sep 30, 2017, CNX Coal had cash of $3.6 million, down from $9.8 million as of Dec 31, 2016.

Total long-term debt as of Sep 30, 2017 was $185.6 million, lower than $198 million as of Dec 31, 2016.

Cash from operating activities for the third quarter was $20 million, down 11.1% from $22.5 million in the year-ago quarter.

Capital expenditure in the reported quarter was $6.8 million, higher than the year-ago level of $3.1 million.

CNX Coal Resources LP Price, Consensus and EPS Surprise

Cash Distribution Update

CNX Coal maintained third-quarter 2017 cash distribution of 51.25 cents per limited partner unit. The distribution to all unit holders of the Partnership will be made on Nov 15, 2017 to such holders of record at the close of business on November 8, 2017.

Guidance

CNX Coal altered coal sales guidance for 2017 to be in the range of 6.5-6.75 million tons from 6.4-6.9 million tons. Adjusted EBITDA is expected to be in the range of $95-$102 million down from the previous range of $95-$115 million. Maintenance capital expenditure has been narrowed and is now projected in the range of $23-$27 million from the prior guidance of $30-$34 million.

Peer Releases

Cloud Peak Energy Inc CLD reported earnings of 3 cents per share in third-quarter 2017, beating the Zacks Consensus Estimate of 2 cents.

SunCoke Energy, Inc. SXC reported earnings of 18 cents per share in the third-quarter, surpassing the Zacks Consensus Estimate loss of 8 cents.

Upcoming Peer Releases

Natural Resource Partners LP NRP is expected to report third-quarter 2017 results on Nov 6. The Zacks Consensus Estimate is pegged at 92 cents per share.

Zacks Rank

CNX Coal carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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