Consol sees profit rise on coal sales, prices

Posted July 29, 2011

CANONSBURG - Consol Energy Inc. saw its second-quarter profit rise on stronger coal prices and higher sales volumes, but the earnings missed Wall Street estimates.

Southpointe-based Consol, the largest coal and natural gas producer in the Eastern U.S., which recently increased its 2011 coal production target, on Thursday also boosted its 2012 and 2013 production estimates.

The company reported net income of $77.4 million, or 34 cents per share, compared with $66.7 million, or 29 cents per share for the comparable period a year ago.

Adjusted for certain charges, the earnings were 76 cents per share and on that basis fell short of the analysts average expectation of 80 cents per share.

 

Last month, Consol said it will incur charges related to the closure of Mine 84, which had stopped production in 2009. The one-time writedown was $115.5 million.

Total revenue for the quarter ended June 30 was $1.59 billion, up from $1.29 billion, driven by higher-than-expected coal sales of 16.4 million tons, as well as from higher coal prices.

Consol Chief Executive Officer Brett Harvey said the company plans to export 10 million tons this year, which should generate more than $1 billion in revenue. He noted that in the second quarter, the company's Baltimore Terminal, which Consol is expanding, loaded 41 vessels, shipping 3.4 million tons of coal.

Harvey said Thursday the company is also restarting its Amonate mining complex in southern West Virginia, a reserve it had considered selling last year. It is also developing the BMX Mine in the Pittsburgh seam.

"All of these coal projects are driven by increased worldwide coal demand," Harvey said.

After increasing its 2011 coal production target to a range of 62 million to 63 million tons from a range of 60 million to 62 million tons, Consol on Thursday also increased the 2012 and 2013 production estimates by 1 million tons to a range of 60.5 million to 62.5 million tons each year.

The company said it is maintaining 2011 natural gas production at between 150 billion cubic feet and 160 bcf.