Coal Miner Issues Profit Warning
Coal miner Consol Energy Inc. (NYSE: CNX) this morning said that the company would report a net loss for the third quarter that ended on September 30. The company's CFO said:
While precise figures are not yet available, it is clear that the company's previously announced planned and unplanned mine idlings took their toll on third quarter earnings. Fortunately, CONSOL Energy has the balance sheet to maintain market discipline. Even at the end of the quarter, our liquidity remained strong. At September 30, 2012, we had cash of $231 million, no short term debt, and $2.3 billion of capacity under our credit facilities.
Over the past several months the company has temporarily stopped production at some mines and had to deal with a faulty conveyor system that slowed production at two other mines.
The Thomson Reuters earnings estimate for the third quarter had called for $0.36 per share on revenues of $1.33 billion. That Consol is now expecting a loss is very bad news indeed.
The company reported production of 11.6 million tons in the third quarter. The company had estimated total coal sales of 14.9 million tons for the quarter, including 2.1 million tons of metallurgical coal and 12.7 million tons of thermal coal. According to today's announcement, the company produced 800,000 tons of met coal during the quarter, and thermal coal inventories fell by the same amount "as sales outpaced the scaled-back production."
The company's natural gas production for the quarter was down slightly on an absolute basis, but 13% higher than during the same period a year ago on an adjusted basis.
Consol expects fourth-quarter coal production in the range of 13.4 million to 13.8 million tons and natural gas production of 42.5 billion to 44.5 billion cubic feet.
Consol's shares are down 2.7% in the premarket this morning, at $34.20 in a 52-week range of $26.41 to $46.90.