Yahoo Finance CONSOL Energy Expects to Report Q2 Loss on Lower Prices - Analyst Blog
CONSOL Energy Inc. CNX provided a preliminary update on its second-quarter 2015 performance, which is scheduled to be released on Jul 28, 2015. The company expects to report an operating loss, primarily due to lower commodity prices.
However, CONSOL expects to achieve the total production guidance for both the E&P and Coal divisions. The company maintained its annual gas production growth guidance at 30% for 2015 and 20% for 2016.
CONSOL Energy also expects to register a significant impairment charge due to the reduction in the carrying value of CONSOL's conventional shallow oil and natural gas assets, largely resulting from a continuation of depressed NYMEX forward price. Since these impairment charges are non-cash items, they will not affect the company's reserves, Marcellus and Utica Shale segments, or its net asset value.
Earlier this month, CONSOL Energy announced that it will cut its existing workforce by 10% or nearly 470 workers. Management had to take this difficult step to lower its operating costs amid falling commodity prices (read: CONSOL Energy Cuts 470 Jobs amid Weak Commodity Prices).
CONSOL Energy, a Zacks Rank #2 (Buy) stock, has been focused on expanding its natural gas portfolio to buffer itself from the dismal coal market conditions. However, the ongoing weakness in commodity prices has finally caught up with the company.
Preliminary Reports Show Weakness across Board
Cloud Peak Energy CLD provided a preliminary guidance for second-quarter 2015 shipments and revised its annual EBITDA guidance. Second-quarter shipments from the company’s three mines are estimated at 16.0 million tons compared with 20.6 million tons in the second quarter of 2014. The decline in shipments is primarily due to low seasonal demand from its utility customers and rail service interruptions due to flooding (read: Cloud Peak Expects Lower Q2 Shipments on Weak Demand).
SunCoke Energy Inc. SXC provided a preliminary guidance for second-quarter 2015 domestic coke production and domestic capacity utilization. Domestic coke production in the second quarter is estimated at 1,047 thousand tons, down 1.1% year over year, primarily due to a planned maintenance outage at its Granite City facility. Coal production in the second quarter is expected to be 4.9% higher than the first (read: SunCoke Energy's (SXC)Q2 Coke Production Slips 1.1% Y/Y).
Peabody Energy BTU has also announced that its second-quarter 2015 adjusted EBITDA and adjusted EPS were adversely impacted by weather-related shipment issues in the Southern Powder River Basin and lower seaborne coal pricing (read: Peabody Energy Q2 Affected by Weather Issues, Weak Prices).
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