CONSOL Energy Inc. (CNX): A Must Buy Energy Stock – Peabody Energy Corporation (BTU), Arch Coal Inc (ACI)

Page 1 of 2

The American energy company, CONSOL Energy Inc. (NYSE:CNX), produces coal and natural gas for the purpose of power generation and steel making. It is not only the largest producer of underground coal in the United States, but also the top producer of high BTU bituminous coal in the country.

Quarterly earnings

In the fourth quarter of 2012, CONSOL Energy Inc. (NYSE:CNX) beat estimates and reported earningsof $150 million, or $0.43 per share, while analysts were expecting earnings per share of $0.24. Net income fell 23% to $150 million, whereas revenue fell 10% to $1.39 billion.

CONSOL Energy Inc. (NYSE:CNX)Cost per ton sold fell 8% to $48.21. The core reasons behind lower than expected costs included closing down of the high cost Fola mine in West Virginia, less overtime, and lesser maintenance projects. Net income slipped in the fourth quarter amid low met-coal prices, mainly due to lesser demand in Europe and China.

In 2012, the company sold $350 million worth of non-core coal assets in the U.S. and Canada. The company generated a pre-tax profit of $90 million from selling such mines in the fourth quarter. As low gas prices offset volume increase, CONSOL Energy Inc. (NYSE:CNX)’s gas division reported net income of $9 million, almost flat from the earlier quarter.

What’s in store for 2013-2014?

In order to reduce costs further, CONSOL Energy Inc. (NYSE:CNX) Energy has plans of selling its high cost coal mines in 2013 as well.  According to the company, its costs at BMX mine in Western Pennsylvania are gradually decreasing, and will have the lowest cost per ton in 2014.  In 2013, the company has plans of investing $835 million-$935 million in natural gas wells. In the first quarter of 2013, analysts expect the company to earn $0.18 per share on revenue of $1.25 billion.

For the full year, analysts estimate CONSOL Energy Inc. (NYSE:CNX) to earn $1.06 per share on revenue of $5.12 billion. 2014 estimates look really promising as the company is expected to earn $2.17 per share on total revenue of $5.89 billion.

U.S. energy outlook

According to the U.S. Energy Information Administration (EIA), record warm temperatures in 2012 were the chief reason behind low natural gas prices. As a result, energy companies shifted to natural gas instead of coal for power generation purposes. Given the fact that 2013 and 2014 are expected to have average winter temperatures, natural gas prices would see a slightly upward trend. Moreover, lesser coal demand in 2012 means high coal inventories on hand for 2013, putting a downward pressure on coal prices. Hence, thermal coal’s demand is expected to rise in the coming years.

(Source: www.EIA.org)

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!