* Q4 adj EPS 54 cents vs Street view 55 cents
* Cuts back natural gas rig count
* Stock drops 5.3 percent (Updates with analyst comments, gas data, stock drops)
By Steve James
NEW YORK, Jan 27 (Reuters) - Coal and natural gas producer Consol Energy Inc's (CNX.N) fourth-quarter profit fell 27 percent, missing Wall Street estimates and sending its stock down more than 5 percent.
The company said on Thursday that it was scaling back its number of natural gas drilling rigs in the northeastern United States and that it was in discussions with several bidders to sell some steel-making metallurgical coal assets in central Appalachia.
But Consol also said it planned to expand export markets in Asia to sell more metallurgical coal, particularly to India.
Last year the company generated more profit from selling to steelmakers than from thermal coal used in power generation as it lined up metallurgical coal customers in China.
Stifel Nicolaus analyst Paul Forward said the earnings miss resulted from "minor disappointments in coal and gas pricing and costs."
But he said Consol's full-year 2011 coal targets would be difficult to reach without continued strength in metallurgical coal pricing or a rebound in natural gas prices.
Consol said it still expected to produce and sell 59 million to 61 million tons this year and set a target of 15.5 million to 16 million for the first quarter.
Analyst Jeremy Sussman of Brean Murray Carret & Co wrote in a research note that Consol could represent a buying opportunity as coal prices continue to rise.
"Consol is well positioned to benefit both from its open position of met coal (up to 5 million tons left to price) and potential asset sale," Sussman said.
Pittsburgh-based Consol, which has moved aggressively into drilling in the vast Marcellus Shale natural gas deposit in the Northeast, said it was scaling back its plans this year because of lower gas prices stemming from continued weakness in the industrial sector.
"For 2011, we've reduced the planned build-up of our horizontal rig fleet in the Marcellus Shale from an average of five rigs to our new plan of averaging just under four rigs for the year," said Chief Executive Officer Brett Harvey.
On the plans to sell central Appalachian metallurgical coal assets, which Consol revealed last year, Harvey said only that the company was negotiating with several bidders and expected to reach definitive agreements in the near future.
Fourth-quarter net income fell to $104 million, or 46 cents per share, from $143 million, or 78 cents per share, a year earlier.
Excluding special items, the company earned 54 cents per share and on that basis, missed analysts' expectations of 55 cents, according to Thomson Reuters I/B/E/S.
Pittsburgh-based Consol said revenue came to $1.34 billion. Coal revenue rose 10 percent to $1.1 billion on sales of 17.0 million tons.
Earlier this month, Consol said it had mined more coal in the fourth quarter than any other in 2010 as flooding in Australia restricted supply and boosted prices.
"We will continue to seek international sales opportunities where our coal can command the highest prices," said Harvey. "Consol's marketing strategy for 2011 is to continue to develop new overseas markets into which we can sell our (high-volatility metallurgical) coal."
Volatility, or the burn temperature of coal, is crucial in steelmaking.
Harvey said unit margins had expanded considerably from the third quarter, as prices continued to strengthen while costs decreased by more than $5 per ton.
In afternoon New York Stock Exchange trading, Consol stock was down 5.3 percent at $48.79. (Reporting by Steve James and Vaishnavi Bala in Bangalore; Editing by Unnikrishnan Nair, Dave Zimmerman, Lisa Von Ahn)