TribLIVE

| Business


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Consol Energy posts $25 million loss despite gas gains

Jasmine Goldband | Tribune-Review
Walter Baranowski, 27, of Follansbee, W. Va. bolts the ceiling as part of his training on a piece of equipment at Consol Energy Inc. Bailey Mine Complex in Greene County Friday, June 6, 2014.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

Tuesday, July 29, 2014, 7:30 a.m.
 

Leaders at Consol Energy Inc. expressed optimism Tuesday in the company's natural gas production and coal sales despite a widened loss in the latest quarter.

“Our momentum continues to build,” CEO Nick DeIuliis said while discussing second-quarter results that the Cecil-based company says were offset by several one-time expenses.

Consol boosted gas production 34 percent over last year to a company record 51.9 billion cubic feet during the three months that ended June 30, increasing revenue to $937.4 million, a 13 percent jump from the same quarter last year. On the mining side, leaders said they have a plan to overcome a depressed international market for metallurgical coal.

Several big charges during the quarter — including $74 million for early retirement of debt and a $20 million pension settlement — drove down the bottom line. The company's loss worsened in the second quarter to $24.9 million, or 11 cents a share. It had a loss of $12.5 million, or 5 cents a share, in the same period last year.

Company officials played up the positives during a conference call with analysts. They predicted continued production gains in gas and coal, more efficiency in drilling wells in the Marcellus and Utica shales and more pipeline capacity to move the gas to markets.

“In takeaway, you guys seem to be in quite good shape compared to others,” said Neal Dingmann, an analyst at SunTrust Robinson Humphrey in Atlanta.

Consol had warned of the loss in a production update two weeks ago that sent its stock price down. Investors seemed less concerned about Tuesday's report; the stock price closed up 38 cents at $40.32.

Analyst Michael Dudas with Sterne Agee in Birmingham, Ala., noted that Consol had good news on its coal markets, a rarity in that industry. Despite its recent focus on gas exploration and production, more than half of Consol's revenue comes from coal.

The company increased its estimate of how much coal it could mine from the Pittsburgh seam by about 32 percent, based on better longwall mining technology.

Consol lowered its expectation for how much metallurgical coal it would sell for steelmaking this year by about 17 percent, but leaders discussed a strategy to improve sales next year. DeIuliis said staff from Consol's research and development facilities are working with potential buyers to develop custom mixes of coal types to fit their needs.

“We've been getting a very good response from the customers as far as incorporating us into their blends for next year,” he said.

Sales of thermal coal from the Bailey complex in Pennsylvania used to fuel power plants remain rich, even as some utilities on the coast are importing coal from overseas. DeIuliis said that for every ton of coal produced at Bailey “we have a customer waiting to take it.”

The company is focused on signing contracts for that coal with power plants designated to run continuously for the next few years.

David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or dconti@tribweb.com.

 

 

 
 


Show commenting policy

Most-Read Business Headlines

  1. ‘Cause for Paws’ telethon helps dogs find homes
  2. Real estate union: Howard Hanna buys Langholz Wilson Ellis
  3. EPA says it won’t regulate coal ash as hazardous waste
  4. As smokers seek Cuban cigars, retailers point to trade embargo
  5. Coal ash sites have tainted hundreds of waterways, aquifers
  6. ExOne Co. moves solidify authority under CEO
  7. Americans support strict rules for drones in poll
  8. First Niagara to cut 200 jobs; Pittsburgh impact unclear
  9. Pennsylvania jobless rate drops to 5.1 percent
  10. Treasury turns profit as it exits GM bailout
  11. Some in Western Pa. affected by Staples data breach
Subscribe today! Click here for our subscription offers.