Boston, MA 05/01/2014 (wallstreetpr) – CONSOL Energy Inc. (NYSE:CNX) is a$10 billion market capped company. The company produces coal and natural gas. The company recently issued Q1 earnings that beat Wall Street estimates and also overturned the loss suffered a year earlier.
To achieve real value for investors by allocating resources on only projects that promise to deliver that value, the company has opened internal contest for capital allocation.
The company organized its natural gas operations into two separate units as exploration and production teams. The teams are required to vie for the capital for specific projects that can provide the greatest value on investment. Such organizations are part of what the company calls multi-disciplined and data-driven improvement approach.
In a conference call with analysts and investors, the company’s president and next CEO Nicholas J. Deluliis updated shareholders on various improvements the company is trying to undertake to make sense of their investment. As a veteran in matters natural gas and coal, Mr. Deluliis should know better about how to turnaround a company in a tough economic environment.
Capital up for grabs
CONSOL Energy Inc. (NYSE:CNX) announced an intention to boost its natural gas production by 30 percent over each of the next three years. As such, the company has earmarked $900 million for the production improvement in its natural gas unit. That unit is the one that has been organized into exploration and production for the purposes of efficiency and growth. Therefore, the two teams will be vying for the lion’s share of the natural gas capital allocation.
Q1 profit was an encouragement
CONSOL Energy Inc. (NYSE:CNX) reported Q12014 profit of $116 million, translating to 50 cents per share. That figure compared favorably with $1.6 million loss or 1 cent per share in the same period a year earlier. Revenue in the quarter was up 15 percent to $969 million. Wall Street expected to seen earnings of 19 cents per share on revenue of $912 million for the quarter.
Shares of the company jumped on the earnings improvement. Analysts also reacted with upgrade notes. Deutsche Bank, for example, reaffirmed its “buy” rating on the stock but increased price target to $53 from $50.
