Coal miner Consol's Q3 profit rises, beats Street

Thu Oct 27, 2011

* Q3 net profit 73 cts/shr v Wall St view 68 cts/shr
* Revenue of $1.4 billion is company's highest Q3

Oct 27 (Reuters) - Coal and natural gas producer Consol Energy Inc's third-quarter profit beat Wall Street estimates, more than doubling on higher prices for its steel-making coal.

The company also raised its annual dividend 25 percent.

Net income was $167 million, or 73 cents per share, compared with $75 million, or 33 cents per share, a year earlier, the Pittsburgh-based company said on Thursday.

Analysts on average were expecting earnings of 68 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose to $1.4 billion -- Consol's highest ever for a third quarter. Most of the increase came from much higher average realized prices from steel-making metallurgical coal sales. The average was $209 per ton, compared with $165.61 per ton a year earlier.

For the second consecutive quarter, Consol generated more cash from its metallurgical business than from thermal, or steam coal, which is used to power electricity generation.

But Consol said profitability in its natural gas business division slipped from the 2010 quarter, despite 13 percent higher gas volumes. Unit gas margins fell, primarily due to a decrease in realized gas prices, it said, while unit gas costs declined, mostly because of higher proved reserves.

Consol said it expects overall unit costs to continue to decline over time as the company increases its emphasis on low- cost drilling in the Marcellus Shale region of the northeastern United States.

In the third quarter, Consol produced 14.7 million tons of coal -- in line with its estimate -- and it anticipates fourth-quarter production of 14.7 million to 15.3 million tons.

Two weeks ago, Consol said production at two of its Appalachian mines was affected by structural problems, but it still expects to hit its targets for the year.

Last month, the company raised its 2011 coal export forecast, saying it sees higher shipments to Asia and expects overall export markets to remain strong this year.

Consol's board of directors increased the regular annual dividend 25 percent, or 10 cents per share, to 50 cents per share. The regular quarterly dividend of 12.5 cents per share, is payable on Nov. 25, to shareholders of record on Nov. 11.

(sourced Reuters)