Diversified fuel producer CONSOL Energy Inc. CNX reported an adjusted loss of 11 cents per share for the fourth quarter of 2015, much wider than the Zacks Consensus Estimate of a loss of 5 cents. The company had reported earnings of 25 cents per share in the fourth quarter of 2014.
Consol Energy Inc. - Earnings Surprise | FindTheBest
GAAP earnings were 13 cents per share as compared to 32 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 18.6% year over year to $762 million. However, revenues marginally surpassed the Zacks Consensus Estimate of $756 million.
Full-year revenues were $3.1 billion, outpacing the Zacks Consensus Estimate by 3.7% but lagging the 2014 level of $3.7 billion by 16.4%.
The decline in total revenues was primarily due to the depressed commodity price environment, which has taken a toll despite the improvement in production volumes.
Segment Performance
Coal Division
In the quarter, the company produced 6.2 million tons of coal. Of the total production, 4.6 million tons came from Pennsylvania operations, 1.1 million tons from Virginia and 0.5 million tons from Other operations.
The company sold 6.6 million tons of coal, compared with 8.1 million tons in the prior-year quarter. From its Pennsylvania operations, the company sold 5 million tons, down 23% year over year, with the sales price per ton declining 12.5% to $52.57.
From its Virginia operations, the company sold 1.1 million tons of coal, flat year over year, with the sales price per ton plunging 29.4% to $48.41.
From its Other operations, the company sold 0.5 million tons, unchanged from the year-ago level. However, the sales price per ton increased 2.1% to $60.65.
Exploration & Production (E&P) Division
During the reported quarter, the company registered 35% year-over-year growth in gas production volumes to 95.5 billion cubic feet equivalent (Bcfe), which was in line with the guidance of 92–97 Bcfe.
Despite the increase in gas output, the full benefit could not be realized due to a year-over-year decline of $1.12 in the average selling price per one thousand cubic feet (Mcf).
Financial Update
As of Dec 31, 2015, the company’s cash and cash equivalents declined to $72.6 million from $176.9 million as of Dec 31, 2014.
Total long-term debts as of Dec 31, 2015, were $2.7 billion, lower than $3.2 billion as of Dec 31, 2014.
Cash from operating activities in 2015 was $505.8 million compared with $936.8 million in 2014.
Capital expenditure in 2015 was $1,022.6 million, lower than the comparable year-ago level of $1,493.4 million.
Guidance
CONSOL Energy expects 2016 coal sales in the range of 27−32 million tons. The company expects 2017 coal sales of 30.5−33.4 million tons.
CONSOL Energy has brought down its 2016 production growth outlook to 15% from the previously mentioned 20%, off a 2015 base and also lowered its E&P Division capital spending plan from $400−$500 million to $205−$325 million.
Total gas production hedged by the company for the first quarter of 2016, full-year 2016 and full-year 2017 is 58.9 Bcfe, 223.7 Bcfe and 156.6 Bcfe, at average prices of $3.55 per Mcf, $6.86 per Mcf and $6.15 per Mcf, respectively.
Upcoming Peer Releases
Natural Resource Partners LP NRP is expected to report fourth-quarter results on Feb 11, 2016 and the Zacks Consensus Estimate stands at 10 cents.
Cloud Peak Energy Inc. CLD is scheduled to report fourth-quarter results on Feb 17, 2016 and the Zacks Consensus Estimate stands at a loss of $17 cents.
Peabody Energy BTU is scheduled to report fourth-quarter results on Feb 11, 2016 and the Zacks Consensus Estimate stands at a loss of $7.89.
Zacks Rank
CONSOL Energy currently has a Zacks Rank #3 (Hold).
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