CONSOL (CNX) Misses Q3 Earnings Estimates, Revenues Top

Diversified fuel producer, CONSOL Energy Inc. (NYSE:CNX) incurred loss of 15 cents per share in third-quarter 2017, missing the Zacks Consensus Estimate of earnings of 3 cents.

The company is working hard to separate its coal and natural gas business and is expected to complete the same before the end of this year.

Revenues

CONSOL’s total revenues of $671.3 million in the third quarter surpassed the Zacks Consensus Estimate of $609 million by 10.3%.

However, total revenues were nearly 10.6% lower than $745.6 million recorded in the year-ago period. The year-over-year decline was due to lower contribution from coal sales and lower gain on Commodity Derivative Instruments.

Segment Performance

Pennsylvania Mining Operations Division

Pennsylvania Operations sold 6.3 million tons of coal in the reported quarter compared with 6 million tons in the year-ago period.

Total cost of coal sold was $37.32 per ton, higher than $35.79 in the year-ago quarter.

Total sales price per ton was $44.16 compared with $44.30 in the prior-year quarter. Due to a drop in sales price and cost of production per ton, year-over-year margins per ton declined 19.6% to $6.84 per ton.

Exploration & Production (E&P) Division

CONSOL registered a 5% year-over-year reduction in gas sales volumes to 101.0 billion cubic feet equivalent (Bcfe) in the third quarter. The improvement was primarily due to higher Marcellus Shale volumes.

The average sales price of $2.50 per thousand cubic feet gas equivalent (Mcfe), when combined with unit cost of $2.26 per Mcfe, resulted in a margin of 24 cents per Mcfe. This indicated a 33.3% year-over-year increase in the E&P margin of 18 cents per Mcfe.

Financial Update

As of Sep 30, 2017, the company’s cash and cash equivalents were $285.7 million, up from $60.5 million as of Dec 31, 2016.

Total long-term debts as of Sep 30, 2017 were $2.53 billion, down from $2.76 billion as of Dec 31, 2016.

Cash from operating activities in the quarter was $178.7 million compared with $167.5 million in third-quarter 2016.

Capital expenditure was $177.3 million, up substantially from $64.1 million a year ago.

Guidance

CONSOL reiterated its 2017 E&P Division production in the range of 405-415 Bcfe. It raised its 2017 E&P capital expenditure to the range of $620-$645 million from the previous guidance of $555 million.

The company also reiterated its 2018 E&P Division production to a range of 520-550 Bcfe.

Zacks Rank

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

Peer Releases

CNX Coal Resources L.P.’s (NYSE:CNX) third-quarter 2017 adjusted earnings of 7 cents per unit missed the Zacks Consensus Estimate of 42 cents by a significant 83.3%.

Cloud Peak Energy Inc. (NYSE:CLD) reported earnings of 3 cents per share in third-quarter 2017, beating the Zacks Consensus Estimate of 2 cents by 50%.

SunCoke Energy, Inc. (NYSE:SXC) reported earnings of 18 cents per share in the third-quarter, beating the Zacks Consensus Estimate loss of 8 cents.

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