Consol reports stronger Q2 earnings - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Consol Energy Inc. on Thursday, July 26, reported second-income net income of $153 million, compared to $77 million for the same quarter last year.

In terms of EBITDA, a non-GAAP financial measure, earnings were $414 million for the second quarter, up from $321 million in 2011.

In its quarterly earnings report, Consol said several discrete items affected GAAP net income, including gains from the sales of some non-core properties, a charge for reclamation and selenium at the Fola Complex, and a charge for the expiration of certain shallow gas leases. The total after-tax effect of those items was an improvement of $82 million.

"We continue to manage our way through this challenging environment," J. Brett Harvey, chairman and CEO, said in the earnings release. "In fact, we are fortunate to have generated more net income in this year's second quarter than in last year's second quarter, despite the much weaker industry and macro environment. At Consol, we've been working aggressively to manage costs and to raise cash by selling assets that are better suited to others."

In the Coal Division across all of its tons, Consol had 2012 second quarter fully load costs of $52.23 per ton. While that was higher than the 2011 second quarter, it was a drop of $2.17 per ton from the 2012 first quarter.

Consol said low-vol coal continues to be oversupplied in a world economy that has weakened in the last three months. Steel utilization rates are weak in Europe and Brazil, which are Consol's natural export markets. In high-vol coal, softness in the Asian metallurgical markets during the quarter continued to affect price. Consol's high-vol was successfully tried by a European steel mill, but because of a general oversupply of coking coal, the customer is not expected to take shipments until steel demand increases, the company said.

In the weak domestic thermal coal markets, Consol has benefited during a weak thermal market by having nearly all of its coal sold in 2012, the company said. Customer requests for deferrals have largely subsided during hot summer weather. Utility stockpiles, while receding, remain at higher-than-normal levels, the company said.

In the global thermal coal markets, Consol said it expects to continue to sell in European markets under contract and in Asian markets on a spot basis through the remainder of 2012.

The company's production of natural gas in the Marcellus shale region was up 16 percent over 2011. After reducing the second quarter 2011 production by the amount attributable to the sales to Antero and Noble Energy, the adjusted increase was 167 percent, the company said.