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Consol Energy profit misses on weak coal prices

Consol Energy Inc reported a smaller-than-expected quarterly profit, hurt by lower spot prices for low-volume coking coal and thermal coal.

Consol's average margin per ton of low-volume coal sold more than halved to $9.21 from a year earlier, the company said. The average margin per ton of thermal coal fell to $12.47 from $17.62.

The shrinking coal margins weighed on the company's adjusted profit.

Consol reported an adjusted profit of 9 cents per share in the quarter ended Sept. 30, well below the average analyst estimate of 19 cents, according to Thomson Reuters I/B/E/S.

Coal producers have been bearing the brunt of a weak market in recent months as oversupply, falling metallurgical coal prices and slowing demand from China have forced them to cut costs and production.

Coal production accounted for about 55 percent of the company's total revenue.

However, Canonsburg, Pennsylvania-based Consol has made a big push into oil and gas production to offset weakness in its coal-mining business.

Sales of oil, natural gas, and natural gas liquids rose 33.5 percent to $257.4 million from a year earlier, helped by increased production in the Marcellus and Utica shale fields.

Improving gas production helped the company's net loss attributable to shareholders narrow to $1.6 million, or 1 cent per share, from $63.7 million, or 28 cents per share, a year earlier.

Total revenue rose 10 percent to $884.6 million, below analyst expectations of $889.1 million.

Consol's shares closed at $34.23 at the New York Stock Exchange.

Up to Monday's close, the stock had fallen more than 10 percent in the past 12 months, compared to 28 percent drop in the broader Dow Jones U.S. Coal index.

Source: Reuters