Coal and natural gas producer Consol Energy Inc reported a 35 percent fall in quarterly profit, hurt by weak prices for both commodities.
The company, which has shifted its focus to natural gas production, said its coal mining operations would continue to benefit by partnering with the power plants that will be around for many years to come.
U.S. power companies shut or converted over 4,100 megawatts of coal-fired plants last year and are expected to stop burning coal at another 22,100 MW of plants in 2015, according to Thomson Reuters data.
Utilities are shutting down older coal plants instead of upgrading them to meet increasingly strict federal environmental rules due to high costs and abundant supply of cleaner and cheaper natural gas, an alternative to coal.
Consol said on Tuesday it also signed an “innovative” sales agreement with a utility that allows it to sell either coal or natural gas depending on whichever commodity is more cost-effective for a given month.
The company said it expects second-quarter net gas production of about 71-75 billion cubic feat equivalent (bcfe), compared with 71.6 bcfe it produced in the first quarter.
Consol also forecast current-quarter coal sales of 7.1-7.7 million tons, higher than the 6.5 million tons it sold in the quarter ended March 31.
Net income from continuing operations fell 35 percent to $79 million, or 34 cents per share, in the first quarter.
Excluding a charge of $67.7 million on debt extinguishment and a $60 million gain on commodity derivatives, earnings were 37 cents per share.
Revenue fell 8.2 percent to $889.6 million.
Up to Monday’s close of $29.88 on the New York Stock Exchange, Consol’s shares had fallen nearly 12 percent this year.
(Reporting by Anet Josline Pinto in Bengaluru; Editing by Maju Samuel)
This article was from Reuters and was legally licensed through the NewsCred publisher network.