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CONSOL (CNX) Loss Narrower than Expected, Revenues Fall

Diversified fuel producer CONSOL Energy Inc. CNX reported an adjusted loss of 7 cents per share for the first quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of 9 cents.

 

GAAP loss was 43 cents per share as against earnings of 34 cents per share in the prior-year quarter. The difference between GAAP and operating figures in the reported quarter was due to adjustments of certain one-time items.

Revenue

CONSOL Energy’s quarterly revenues decreased 29.6% year over year to $558.5 million and also lagged the Zacks Consensus Estimate of $679 million by 17.8%.

The decline in total revenues was primarily due to the depressed commodity price environment, which has taken a toll despite the improvement in natural gas production volumes. Contribution from its Coal division dropped significantly from the prior year.

Segment Performance
    
Coal Division

In the quarter, the company produced 5.7 million tons of coal. Of the total production, 5.4 million tons came from Pennsylvania operations and 0.3 million tons from Other operations.

The company sold 5.7 million tons of coal, compared with 7.0 million tons in the prior-year quarter. From its Pennsylvania operations, the company sold 5.3 million tons, down 18.5% year over year, with the sales price per ton declining 26.9% to $42.99.

From its Other operations, the company sold 0.4 million tons, down from the year-ago level of 0.5 million tons. The sales price per ton decreased 10.9% to $54.81.

Exploration & Production (E&P) Division

During the reported quarter, the company registered 36% year-over-year growth in gas production volumes to 97.5 billion cubic feet equivalent.

Despite the increase in gas output, the full benefit could not be realized due to a year-over-year decline of $1.27 in the average selling price per one thousand cubic feet.

Financial Update

As of Mar 31, 2016, the company’s cash and cash equivalents were $426.7 million, up from $72.6 million as of Dec 31, 2015.

Total long-term debts as of Mar 31, 2016, were $2.72 billion, in line with the level as of Dec 31, 2015.

Cash from operating activities in first quarter of 2016 was $128.4 million compared with $228.4 million in the first quarter of 2015.

Capital expenditure in the first quarter of 2016 was $78.9 million, lower than the comparable year-ago level of $287.8 million.

Guidance

CONSOL Energy expects 2016 coal sales in the range of 23.9−27.4 million tons. The company expects 2016 total consolidated Coal division capital expenditure between $105 million and $125 million.

CONSOL Energy reiterated its 2016 production growth outlook of 15% for 2016.

Upcoming Peer Releases

SunCoke Energy Inc. SXC is scheduled to release first-quarter results on Apr 27, 2016. The Zacks Consensus Estimate for the quarter stands at 4 cents per share.

Cloud Peak Energy Inc. CLD is scheduled to release first-quarter results on Apr 28, 2016. The Zacks Consensus Estimate for the quarter stands at a loss of 15 cents per share.

Natural Resource Partners LP NRP is scheduled to release first-quarter results on May 5, 2016. The Zacks Consensus Estimate for the quarter stands at $1.27 per unit.

Zacks Rank

CONSOL Energy currently has a Zacks Rank #3 (Hold).

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