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In addition, the company expects to record in the quarter additional net income of approximately $1.03 per diluted share, helped along by the sale of its interest in Australian mine Glennies Creek, and the effect of an accounting change of approximately $81 million regarding the calculation of its workers' compensation liability.
In total, net income for the current quarter is now expected to be at least $1.18 per diluted share compared with $0.10 per diluted share for the same quarter in 2003.
The primary reasons for the improved outlook for the first quarter are better than expected coal production and higher coal prices.
"We are in a great position to reap the benefits from two years of capital investment in our coal segment," said Consol CEO Brett Harvey. "Our expansion projects are coming on line and our existing mines are running well at just the right time -- when industry fundamentals are as strong as they have been in years."
Harvey said it was a risk to have invested significant capital in coal during a two-year period when the coal industry and CONSOL Energy were struggling.
"We have always had great confidence in the value of our coal asset base," he said. "It was hard to stay the course during the past two years, but our commitment to our plan is now paying off."
The company had forecast coal production for the quarter to be between 15 million and 16 million tons. The company now expects production to be at least 16.6 million tons.
In addition, the company had forecast average realized prices for company-produced coal for the quarter to be in the range of $27.80 to $27.95 per ton. Consol now expects average realized prices for company-produced coal for the quarter to be at least $28.50 per ton because the additional tons produced above the target were sold at higher prices than the forecast average.
Consol said it expects the financial results from its gas operations to exceed the earlier forecast due to higher gas prices and lower operating costs. Production volumes are expected to be within the previously forecast range of 13.0 billion cubic feet (gross) to 13.8 billion cubic feet (gross).
