Coal miner Consol Energy's profit, stock drop

Thursday, Jan 27, 2011
* Q4 adj EPS 54 cents vs Street view 55 cents
* Q4 coal revenue up 10 pct
* Stock drops 3 pct before market (Updates with CEO comments, more data, stock drops)

NEW YORK, Jan 27 (Reuters) - Coal and natural gas producer Consol Energy Inc's fourth-quarter profit fell 27 percent, missing Wall Street estimates and sending its stock down 3 percent.
The company said its coal sales jumped 10 percent and for the first time its profit from selling steel-making metallurgical coal, especially to China, exceeded profit from thermal coal which is used in power generation.
It also said it was looking to expand export markets in Asia to sell more metallurgical coal.
"We believe India has great potential and is the next market we will target for high-vol (high volatility) met coal," Chairman, President, and Chief Executive Officer Brett Harvey said in a statement.

In modest electronic trading before the New York Stock Exchange opened, Consol stock dropped 3 percent to $50.00.
Earlier this month, Consol said it mined more coal in the fourth quarter than any other quarter in 2010 as flooding in Australia restricted supply and boosted prices.
"We will continue to seek international sales opportunities where our coal can command the highest prices," said Harvey. "Consol's marketing strategy for 2011 is to continue to develop new overseas markets into which we can sell our high-vol met coal." Volatility, or the burn temperature of coal, is crucial in steelmaking.

Fourth-quarter net income was $104 million, or 46 cents per share, down from $143 million, or 78 cents per share, the Pittsburgh-based company said.
Excluding items, the company earned 54 cents per share and on that basis, missed analyst expectations of 55 cents per share, according to Thomson Reuters I/B/E/S.
Consol said total revenue was $1.34 billion, which included a 10 percent increase in coal revenue of $1.1 billion, driven by sales of 17.0 million tons.

"The combination of new sales of high-vol met coal into China and sales of our low-vol met coal enabled our annual met coal profits to exceed those from our thermal business for the first time in our history," said Harvey.
He said unit margins expanded considerably from the third quarter, as prices continued to strengthen while costs decreased by more than $5 per ton. (Reporting by Steve James and Vaishnavi Bala in Bangalore; sourced: reuters)