Consol Energy (NYSE: CEIX) closed +7% on Tuesday after reporting strong fourth-quarter results, including a record $5.39 per share in quarterly profit that beat analysts’ estimates and an 11% year-over-year increase in coal sales to 6.2 million tons.
Consol (CEIX) said. expects to increase production by ~8% this year, and that it already has contracts to sell 90% of it at prices even 20% higher than it received for 2022.
But a dramatic turnaround in the U.S. coal industry may be running out, Bloomberg reports, as coal prices fall and milder-than-expected weather dampens demand and results in higher inventories.
“We’ve seen significant volatility in the energy markets, which started in late 2022 and continued into early 2023,” Consol Energy ( CEIX ) CEO Jimmy Brock said on the company’s conference call after the earnings report.
While coal producers have locked in orders, utilities may soon have more fuel than they need, and some may seek to renegotiate contracts or delay deliveries; Consol ( CEIX ) said that hasn’t happened yet, but B. Riley analyst Lucas Pipes told Bloomberg he expects requests for a delay to begin soon.
The U.S. Energy Information Administration forecast on Tuesday that U.S. utilities’ coal consumption will decline 16% in 2023, down from last month’s forecast of an 11% decline, with the shift partly linked to mild weather in January. .
Consol Energy (CEIX) Q4 earnings call