PITTSBURGH (AP) — Consol Energy Inc. said Thursday that its net income dropped 23 percent in the fourth quarter on lower sales and prices of some kinds of coal.
Consol said earlier this month that it would concentrate on gas operations in the future and will not invest as much in coal. It said coal sales volumes fell by 500,000 tons compared to the fourth quarter of 2011, and prices for low- and high-volatility coal decreased. Thermal coal sales and prices improved.
The company reported a $328 million payment from partner Noble Energy, and recorded one-time gains after selling off some assets.
Net income fell to $149.9 million, or 65 cents per share, from $195.6 million, or 85 cents per share, a year ago. The results included a gain of $90 million, or 26 cents per share, from an asset sale and a severance charge that reduced its income by $13 million, or 4 cents per share. Revenue fell 10 percent, to $1.39 billion.
Analysts expected net income of 24 cents per share on $1.27 billion in revenue, according to FactSet.
Demand for coal has dropped partly because of low natural gas prices. Some utilities are using more natural gas, instead of coal, to generate electricity. In addition mild weather so far this winter has reduced demand for heating in homes and businesses.
Consol sold $350 million in "non-producing assets" in 2012. Those assets included coal reserves or resources in Central Appalachia, the Great Plains, and Western Canada. It expects to sell more assets in 2013. Consol also says it won't invest much in coal beyond maintaining existing projects and does not plan to invest in new coal growth projects once it completes its BMX mine. The mine is expected to be finished in the first quarter of 2014.
Net income fell 39 percent in 2012, to $388.5 million, or $1.70 per share, from $632.5 million, or $2.76 per share. Revenue fell 11 percent, to $5.43 billion.
Shares of Consol Energy rose 8 cents to $31.23 in midday trading.
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