Boston, MA 05/06/2014 (wallstreetpr) – CONSOL Energy Inc. (NYSE:CNX) recently raised concerns about the demand for the low-vol coal that it produces at the Buchanan Mine. The company said it was prepared to cut production at the mine if the present horrible market conditions did not improve. However, the management left options open that the production would be increased at Buchanan if demand did improve. The remarks were made last week during a conference call with investors and analysts following the release of Q12014 results.
However, CONSOL Energy Inc. (NYSE:CNX) seems to have found a direction on the Buchanan mine faster than expected. The company announced that production at the mine will be trimmed, and jobs cut to curb financial losses. As such, the company expects to produce between 3.6 and 4.2 million tons of coal at Buchanan in the current year. That production range is lower than the production capacity of the mine.
In addition to scaled back production, CONSOL Energy Inc. (NYSE:CNX) also announced layoff of 188 workers at the facility. The laid off workers include 39 salaried employees and 149 hourly employees, the company said in a statement Monday. Following the changes, CONSOL Energy announced that it will observe two production shifts at the Buchanan plant.
Options remain open
The move to cut production and the workforce at the Buchanan mine mirrors the market condition for the low-vol coal especially in the Asian market. However, CONSOL Energy Inc. (NYSE:CNX) believes that its fortunes depend on higher production that has in more than one occasion offset the impact of prices on the market. As such, the company expects to closely track market developments with hopes to restore production when market conditions improve.
Latest quarter
CONSOL Energy Inc. (NYSE:CNX) on April 29, reported Q1 results for the three months trading period ended March 31. The company earned 50 cents per share beating Wall Street estimate of 19 cents per share. Earnings in the quarter a year earlier were 19 cents per share. Revenue in the quarter was $969 million, above the consensus estimate of $887 million. Revenue in the latest quarter was up 15 percent over a year ago quarter.
