Consol Energy Inc. posted a sharply wider loss in the second
quarter, hurt by a hefty impairment expense and soaring production
and exploration costs.
The Pittsburgh-based energy company also said its MetCo initial
public offering, which had been planned for the fourth quarter, was
being put on hold due to the continued degradation of
metallurgical-coal prices. Prices for metallurgical coal, which is
used in steelmaking, have steeply declined this summer.
Shares of Consol rose 5.6% to $18.32 in midday trading but have
still fallen 54% in the past 12 months.
Consol said it is evaluating the possibility of a future
drop-down sale of the mettalurgical-coal business to its CNX Coal
Resources LP, which went public earlier this month, or partnering
with a third party to grow the assets. Consol said it plans to make
a decision by the end of the year.
"Consol is focused on managing through what continues to be a
very challenging commodity price environment," Chief Executive
Nicholas DeIuliis said.
Overall for the period ended June 30, the company reported a
loss of $603 million, or $2.64 a share, compared with a loss of $25
million, or 11 cents a share, a year ago. Excluding certain items,
Consol posted a loss of 37 cents a share.
Consol said while it saw increased production, its top line was
hurt by depressed commodity prices. Total revenue fell 31% to
$648.9 million.
Analysts had projected per-share earnings of 1 cent and revenue
of $798.6 million, according to Thomson Reuters.
Total costs and expenses jumped 61% to $1.54 billion in the
quarter. Consol posted a $829 million pretax impairment expense in
its exploration and production properties. Meanwhile, its costs
associated with exploration and production more than quadrupled,
rising to $1.09 billion from $237.1 million.
Write to Cassandra Jaramillo at cassandra.jaramillo@wsj.com
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