Will CONSOL (CNX) Beat Earnings Estimates?


We expect diversified fuel producer CONSOL Energy Inc. (CNX) to beat expectations when it reports second quarter 2013 results before the market bell on Jul 25, 2013.

Why a Likely Positive Surprise?

Our proven model shows that CONSOL is likely to beat earnings because it has the right combination of two key ingredients. That is because a stock needs to have both a positive earnings Expected Surprise Prediction (ESP) (Read:Zacks Earnings ESP: A Better Method) and a Zacks Rank #1, 2 or 3 for this to happen.

Positive Zacks ESP: ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +16.67%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.

Zacks #3 Rank (Hold): Note that stocks with Zacks Ranks of #1, 2 and 3 have a significantly higher chance of beating earnings. The Sell rated stocks (#4 and 5) should never be considered going into an earnings announcement.  

The combination of CONSOL’s Zacks Rank #3 (Hold) and +16.67% ESP makes us confident of a positive earnings beat on Jul 25th.

What is Driving the Better-Than-Expected Earnings?

CONSOL generates nearly 90% of its revenues from coal related operations. Though coal production in the second quarter declined 5.6% year over year to 13.8 million tons, a 4.9% year-over-year decline in total inventory pointed towards a positive movement in coal demand.

CONSOL Energy's Gas division produced 38.6 billion cubic feet equivalent (Bcfe) in the second quarter, up 3% from 37.3 Bcfe produced in the year-ago quarter.

Peabody Energy Corporation (BTU) reported second quarter 2013 earnings of 33 cents per share, trumping the Zacks Consensus Estimate of a loss of 5 cents.

Other Stocks to Consider

CONSOL is not the only firm looking up this earnings season. We also see likely earnings beats coming from these two industry peers:

Alpha Natural Resources, Inc. (ANR) has earnings ESP of +1.67% and carries a Zacks Rank #3 (Hold).

Suncoke Energy Partners, L.P. (SXCP) has earnings ESP of +6.82% and carries a Zacks Rank #2 (Buy).

Read the Full Research Report on CNX

Read the Full Research Report on BTU

Read the Full Research Report on ANR

Read the Full Research Report on SXCP

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