Consol Energy Inc. (CNX) reported a 19% drop in profit for the fourth quarter as revenue edged lower, though the comparison was skewed by a gain the coal and natural-gas producer posted a year earlier from a tax refund.
Coal and gas companies suffered a decline in income in 2009 as prices fell due to a drop in demand for power and steel that led to a build-up in inventories of both fuels. Consol said it "gained momentum" in the fourth quarter, adding demand for its products--natural gas, coal for power generation and coal for steelmaking--is improving on rising global economic activity and recent cold weather.
"[This year] looks more promising than I thought possible only three months ago," Chief Executive J. Brett Harvey said in the earnings release.
The Pittsburgh-based company said fourth-quarter income was $143.2 million, or 78 cents a share, down from $176.3 million, or 97 cents a share, a year earlier. Consol reported a gain of 20 cents a share from a refund for a black lung excise tax in the year-earlier quarter. Fourth-quarter 2009 revenue fell 0.4% to $1.238 billion.
Analysts polled by Thomson Reuters most recently forecast earnings of 74 cents on revenue of $1.57 billion.
CNX Gas Corp. (CXG), of which Consol owns 83.3%, posted a 29% drop in fourth-quarter earnings to $41.1 million, or 27 cents a share on revenue of $177.8 million, down 14% from a year earlier. Gas futures prices started the fourth quarter not far off their lowest levels in more than seven years, though prices rose steadily through the period as cold weather raised demand for the fuel.
On Monday, CNX Gas, which is active in the prolific Marcellus Shale underlying much of Pennsylvania, New York and parts of other states, said its proved gas reserves shot up 34% to 1.9 trillion cubic feet last year.
Consol Energy also said it sold five vessels of coking coal from mines in northern Appalachia bound for steel mills in China, part of a marketing initiative to boost sales to Asia announced in December.
-By Mark Long, Dow Jones Newswires; (212) 416-2145; firstname.lastname@example.org