Consol Energy’s 1Q16 Earnings: Better Than Analyst Consensus
Is Consol Energy’s Rally Justified after Its 1Q16 Earnings Release?
Consol Energy’s 1Q16 earnings beat estimates
Consol Energy (CNX) announced its 1Q16 earnings on April 26, 2016, before the Market opened. CNX reported an adjusted loss of $0.07 per share, which was $0.02 better than the Wall Street analyst consensus of a loss of $0.09 per share. Consol Energy’s 1Q16 earnings were lower by $0.44 per share compared to a 1Q15 profit of $0.37 per share. But when compared sequentially with 4Q15, Consol Energy’s 1Q16 earnings are higher by $0.04 per share.
Consol Energy’s 1Q16 revenues miss estimates
For 1Q16, CNX reported adjusted revenues of ~$566 million. That’s ~16% lower than the Wall Street analyst consensus of ~$670 million. Consol Energy’s 1Q16 revenues are lower by ~36% compared to 1Q15 revenues of ~$887 million. Even when compared sequentially with 4Q15, CNX’s 1Q16 revenues were lower by ~24%.
Consol Energy’s earnings trend
As you can see in the above graph, Consol Energy reported much lower earnings in 2015 due to lower realized natural gas (UNG) (UGAZ) (DGAZ) prices. In 2Q15, CNX saw its adjusted earnings turn negative for the first time since 4Q13 when CNX beat earnings expectations ~42% of the time.
Due to the steep downward trend in energy prices, almost all upstream companies have declined. Below are some of their adjusted revenues for 4Q15:
Memorial Resource Development (MRD): declined 7% YoY (year-over-year)
WPX Energy (WPX): declined 19% YoY
ConocoPhillips (COP): declined 40% YoY
EV Energy Partners (EVEP): declined 32% YoY
In 4Q15, Memorial Resource Development, WPX Energy, and EV Energy Partners reported a production mix that contained at least 60% natural gas. ConocoPhillips’ production contains a higher liquids percentage.
The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies. The Energy Select Sector SPDR ETF (XLE) invests at least 95% of its total assets in oil and gas companies.
In this series
We’ve already looked at Consol Energy’s 1Q16 earnings performance. In the rest of the series, we’ll look at its operational performance, Wall Street analyst ratings, and CNX’s stock reaction to past earnings beats.
Next, let’s take a look at Consol Energy’s operational performance for 1Q16.
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