CNX Resources Corporation reported its quarterly financial results for the three and nine months ended September 30, 2024. The company’s revenue increased by 12% to $1.23 billion for the nine months ended September 30, 2024, compared to the same period in 2023. Net income for the nine months ended September 30, 2024 was $143.6 million, or $0.96 per diluted share, compared to net income of $134.8 million, or $0.90 per diluted share, for the same period in 2023. The company’s cash flow from operations was $444.8 million for the nine months ended September 30, 2024, compared to $394.9 million for the same period in 2023. The company’s financial position remains strong, with a cash balance of $1.23 billion and no debt as of September 30, 2024.
Overview of the Company’s Financial Performance
CNX, a natural gas company, reported net income of $66 million, or earnings per diluted share of $0.37, for the three months ended September 30, 2024. This was an increase from net income of $21 million, or earnings per diluted share of $0.12, for the same period in 2023.
The company’s total revenue and other operating income increased from $350 million in Q3 2023 to $424 million in Q3 2024. This was primarily due to higher sales of environmental attributes, which increased from $15 million to $25 million.
Revenue and Profit Trends
Sales of natural gas, NGLs and oil, including cash settlements, a non-GAAP financial measure, decreased slightly from $357 million in Q3 2023 to $354 million in Q3 2024. This was due to an 8.9 Bcfe decrease in total sales volumes, partially offset by higher realized prices.
Natural gas, NGL and oil production costs, another non-GAAP measure, increased from $229 million in Q3 2023 to $237 million in Q3 2024. This was primarily due to higher transportation, gathering and compression costs as well as higher depreciation, depletion and amortization expenses.
As a result, natural gas, NGL and oil production margin, a non-GAAP measure, decreased from $128 million in Q3 2023 to $117 million in Q3 2024.
Strengths and Weaknesses
A key strength for CNX is its ability to generate revenue from the sale of environmental attributes, which increased significantly year-over-year. This demonstrates the company’s focus on developing new revenue streams beyond just natural gas production.
However, a weakness is the decline in total sales volumes, which put pressure on the company’s profitability. The decrease in production was due to normal declines and the timing of new wells being brought online.
Outlook
Looking ahead, CNX expects capital expenditures for 2024 to range between $525-$550 million, with production volumes forecast between 545-555 Bcfe for the full year. The company will need to carefully manage costs and focus on maximizing the value of its environmental attribute sales to offset the impact of declining production volumes.
Overall, CNX appears to be navigating a challenging natural gas market environment through diversification of its revenue streams and disciplined capital allocation. However, the company’s long-term success will depend on its ability to replace reserves and sustain production levels.