UPDATE 2-Coal miner Consol's Q1 profit beats Street on 2011
8:24 AM
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* Q1 EPS 84c/shr v Street view 80c/shr
* Revenue $1.4 billion
* Says increasing 2012, 2013 coal production (Updates with company, analyst comments, production data, outlook)
NEW YORK, April 28 (Reuters) - Coal and natural gas company Consol Energy (CNX.N) beat Wall Street estimates with a big jump in quarterly profit, helped by higher-than-expected coal sales and surging prices.
The company also raised its coal production targets for 2012 and 2013 and said it will reopen an idled Virginia mine and expand its Baltimore port capacity to handle growing demand for exports.
First-quarter net income was $192 million, or 84 cents per share, compared with $100 million, or 54 cents per share, a year earlier, the Pittsburgh-based miner said on Thursday.
Total revenue rose to $1.4 billion, driven by coal sales of 16.7 million tons, as recent flooding in Australia restricted supply and boosted prices for steel-making metallurgical coal in particular.
Analysts on average were expecting earnings of 80 cents per share, according to Thomson Reuters I/B/E/S.
"The bottom line is (that) with a solid quarterly beat, positive strategic developments announced, and encouraging met (metallurgical) coal commentary, we expect Consol to be a solid outperformer today," said analyst Jeremy Sussman, of Brean Murray Carret & Co.
Earlier this month, Consol said first-quarter coal production was 17.2 million tons and it increased its 2011 production goal from a range of 59 million to 61 million tons to between 60 million and 62 million tons.
On Thursday it also increased its 2012 and 2013 targets by 500,000 tons each -- to a range of 59.5 million to 61.5 million tons for both years.
During the first quarter, the company said the average realized coal prices increased by about $10 per ton while costs increased about $2 per ton compared to the prior year.
"A cold European winter, coupled with an improving economy and changing supply dynamics, has created increased demand for U.S. coals at pricing equal to or better than can be achieved domestically," Consol said in its earnings statement.
The company said it had decided to reopen its idled Amonate Complex in Amonate, Virginia, with 240 million tons of metallurgical reserves. Consol had previously offered the mine up for sale.
"With the rapidly improving market for the met coal produced by Amonate, and with the industry's M&A (mergers and acquisitions) activity creating some distraction for potential buyers, we now believe that a reopening of the mine will yield the best value for our shareholders," it said.
"Because of the continued growth of Consol Energy's coal export business, and recent international developments, the company has decided to expand the capacity of its Baltimore Terminal by 2 million tons, to 16 million tons per year," it said. (Reporting by Steve James and Matt Daily; Editing by Derek Caney, Dave Zimmerman) (Reporting by Steve James)
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