Can CONSOL Energy (CNX) Surpass Q1 Earnings Estimates? - Analyst Blog
CONSOL Energy Inc. CNX will release first-quarter 2015 earnings results before the market opens on Apr 28, 2015. This multi-fossil fuel producer reported a positive earnings surprise of 25% last quarter. We expect CONSOL to beat expectation in this quarter too.
Why a Likely Positive Surprise?
Our proven model shows that CONSOL Energy 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 ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is at +18.18%. This is a meaningful and leading indicator of a likely positive earnings surprise for the shares.
Zacks Rank: The combination of CONSOL Energy’s Zacks Rank #3 and +18.18% ESP makes us confident of an earnings beat.
The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.
What's Driving the Better-than-Expected Earnings?
CONSOL Energy’s focus on natural gas operation is yielding positive results and will continue to benefit the company in the first quarter of 2015. CONSOL’s focus on the Marcellus and Utica plays will help it to achieve its 30% year-over-year growth targets.
During the quarter, the company lowered its projected E&P expenditure to $920 million from its prior guidance of $1 billion. We believe it is a smart move from CONSOL to develop high-quality projects in this low commodity price environment and stay in wait for better opportunities to come its way. The cost reduction initiatives undertaken by CONSOL will continue to have a positive impact on its margins.
CONSOL Energy has undertaken efficiency programs in its Buchanan mines, which will lower the cost of operations and keep the mines viable in this challenging metallurgical coal market scenario.
Recently, the solely coal-based operator Peabody Energy BTU reported a wider-than-expected loss of 62 cents in the first quarter, resulting in a negative surprise of 87.9%.
Other Stocks to Consider
There is hardly any coal miner apart from CONSOL worth recommending at the moment. But there are a few utilities with coal-fired generation worth considering now. They have the right combination of elements to post an earnings beat this quarter.
Dominion Resources, Inc. D has an earnings ESP of +1.04% and carries a Zacks Rank #3.
NiSource Inc. NI has an earnings ESP of +2.50% and carries a Zacks Rank #3.
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CONSOL ENERGY (CNX): Free Stock Analysis Report
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