PITTSBURGH (AP) — Coal miner Consol Energy Inc. said Thursday that first-quarter earnings fell 49 percent as mild winter weather and cheap natural gas sapped demand for coal.
Net income fell to $97.2 million, or 42 cents per share, from $192.1 million, or 84 cents per share, a year earlier. Revenue dipped 2.6 percent to $1.43 billion.
Analysts expected the company to earn 58 cents per share on revenue of $1.40 billion, according to FactSet.
Coal producers like Consol have been hurt by low natural gas prices, as some utilities switch from coal to run generators. Comsol was able to offset some of that weakness by exporting coal used in steel-making to emerging markets like China, but cracks have developed in that strategy as China's economy slows.
"We have been managing our way through this challenging environment," said Chairman and CEO J. Brett Harvey. "The very warm winter, weakened economy, and low natural gas prices have quickly turned a tight coal environment into a surplus."
Consol said it would restart idled operations at its Buchanan Mine in southwest Virginia and Blacksville No. 2 mine in West Virginia on Tuesday.
The company said it had completed negotiations with coal customers over deferred shipments from Blacksville. Consol idled the longwall mining operation at Buchanan rather than sell its steel-making coal at cheap prices, but it said Thursday that it "has now come to terms with its customers" and would restart the operation.
Harvey said foreign steel makers "have been taking advantage of a lull in the strong longer term market to pressure coal producers into accepting prices lower than the benchmark."
Consol lowered its forecast for 2012 coal production to between 58.9 million and 60.9 million tons, from a January outlook of 59.5 million to 61.5 million tons.
The company has been expanding its natural gas production, although that has exposed it to weak prices for gas. Consol said it will produce between 157 billion and 159 billion cubic feet of gas this year, up from 153.5 billion cubic feet last year but down from January's 2012 estimate of 160 billion cubic feet.
Consol shares fell $1.57, or 4.6 percent, to $32.97 in afternoon trading.