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What's in Store for Chesapeake (CHK) This Earnings Season?
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Chesapeake Energy Corporation (CHK - Free Report) is scheduled to report second-quarter 2018 results on Aug 1, before the opening bell.
For first-quarter 2018, the company, which primarily focuses on oil and gas exploration as well asproduction activities, reported a positive earnings surprise of 36%. Chesapeake beat the Zacks Consensus Estimate in all the previous four quarters, the average positive earnings surprise being 26.1%.
Chesapeake Energy Corporation Price and EPS Surprise
Let’s see how things are shaping up prior to the announcement.
Which Way Are Estimates Treading?
Let’s look at the estimate revision trend to get a clear picture of what analysts are expecting from the company’s upcoming results.
The Zacks Consensus Estimate for second-quarter earnings is pegged at14 cents, with five firms being bullish and one firmbeing bearish over the past 30 days. The figure reflects year-over-year declineof 22.2%.
Further, the Zacks Consensus Estimate for revenues is pegged at$1.12 billion, showing a decline of 12.4% from the year-ago quarter’ tally.
Factors Likely to Affect Results
Per the Zacks Consensus Estimate, Chesapeake’s production for the current quarter is pegged at 48.1 million barrels of oil equivalent (MMBoe), showing a decline from 50 MMBoe in the preceding quarter and 48 MMBoe in the year ago quarter.
The Zacks Consensus Estimate for oil production is pegged at 7.91 million barrels (MMbbls), showing a decline from 8 MMbbls in the year-ago quarter and from 8 MMbbls in the last reported quarter.
The Zacks Consensus Estimate for natural gas production is pegged at 212 billion cubic feet (bcf), which shows an increase from 209 bcf in the year-ago quarter but a decline from 222 bcf in the January-to-March quarter.
The Zacks Consensus Estimate for average realized price of oil (including realized gains on derivatives) is pegged at $56 per barrel, showing a growth from year ago quarter’s price of $51.65 but a decline from $57 in the last reported quarter.
Per the consensus mark, average realized natural gas price are projected to decline 25.2% and 3.7% from the preceding quarter and year ago quarter to $2.61 per thousand cubic feet (mcf).
The downside in the commodity prices and oil equivalent production— as compared withthe last reported quarter — is likely to affect upstream players like Chesapeake.
However, Chesapeake has been successful with cost-cutting efforts and has been reducing cost inthe pasttwo years. During the first quarter, the company reported significant declinein operating expenses. Marketing expenses fell 4.5% year over year. Moreover, Chesapeake has the deepest inventory in the preeminent part of the Utica as well as some of the finest locations in the Eagle Ford and Marcellus. These are likely to help the company achieve targets. Benefits from cost-cutting initiatives as well as inventory holdings will be reflected in second-quarter 2018 results.
Earnings Whispers
Our proven model does not show a beat for Chesapeake this earnings season. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.61%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Chesapeake carries a Zacks Rank #3.
Conversely, Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Price Performance
During the quarter, the company’s shares surged 73.5% compared with the industry’s 12.5% rise.
Stocks to Consider
Here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.
Cheniere Energy, Inc. LNG, based in Houston, is engaged in businesses related to liquefied natural gas. The company has an Earnings ESP of +5.25% and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crude oil and refined products logistics and marketing assets are owned, operated, purchased and constructed by Delek Logistics Partners L.P. DKL. The partnership has an Earnings ESP of +0.63% and a Zacks Rank #1.
Occidental Petroleum Corporation (OXY - Free Report) is an international oil and gas exploration and production company. The company has an Earnings ESP of +1.75% and carries a Zacks Rank #2.
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Image: Bigstock
What's in Store for Chesapeake (CHK) This Earnings Season?
Chesapeake Energy Corporation (CHK - Free Report) is scheduled to report second-quarter 2018 results on Aug 1, before the opening bell.
For first-quarter 2018, the company, which primarily focuses on oil and gas exploration as well asproduction activities, reported a positive earnings surprise of 36%. Chesapeake beat the Zacks Consensus Estimate in all the previous four quarters, the average positive earnings surprise being 26.1%.
Chesapeake Energy Corporation Price and EPS Surprise
Chesapeake Energy Corporation Price and EPS Surprise | Chesapeake Energy Corporation Quote
Let’s see how things are shaping up prior to the announcement.
Which Way Are Estimates Treading?
Let’s look at the estimate revision trend to get a clear picture of what analysts are expecting from the company’s upcoming results.
The Zacks Consensus Estimate for second-quarter earnings is pegged at14 cents, with five firms being bullish and one firmbeing bearish over the past 30 days. The figure reflects year-over-year declineof 22.2%.
Further, the Zacks Consensus Estimate for revenues is pegged at$1.12 billion, showing a decline of 12.4% from the year-ago quarter’ tally.
Factors Likely to Affect Results
Per the Zacks Consensus Estimate, Chesapeake’s production for the current quarter is pegged at 48.1 million barrels of oil equivalent (MMBoe), showing a decline from 50 MMBoe in the preceding quarter and 48 MMBoe in the year ago quarter.
The Zacks Consensus Estimate for oil production is pegged at 7.91 million barrels (MMbbls), showing a decline from 8 MMbbls in the year-ago quarter and from 8 MMbbls in the last reported quarter.
The Zacks Consensus Estimate for natural gas production is pegged at 212 billion cubic feet (bcf), which shows an increase from 209 bcf in the year-ago quarter but a decline from 222 bcf in the January-to-March quarter.
The Zacks Consensus Estimate for average realized price of oil (including realized gains on derivatives) is pegged at $56 per barrel, showing a growth from year ago quarter’s price of $51.65 but a decline from $57 in the last reported quarter.
Per the consensus mark, average realized natural gas price are projected to decline 25.2% and 3.7% from the preceding quarter and year ago quarter to $2.61 per thousand cubic feet (mcf).
The downside in the commodity prices and oil equivalent production— as compared withthe last reported quarter — is likely to affect upstream players like Chesapeake.
However, Chesapeake has been successful with cost-cutting efforts and has been reducing cost inthe pasttwo years. During the first quarter, the company reported significant declinein operating expenses. Marketing expenses fell 4.5% year over year. Moreover, Chesapeake has the deepest inventory in the preeminent part of the Utica as well as some of the finest locations in the Eagle Ford and Marcellus. These are likely to help the company achieve targets. Benefits from cost-cutting initiatives as well as inventory holdings will be reflected in second-quarter 2018 results.
Earnings Whispers
Our proven model does not show a beat for Chesapeake this earnings season. That is because a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -2.61%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Chesapeake carries a Zacks Rank #3.
Conversely, Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Price Performance
During the quarter, the company’s shares surged 73.5% compared with the industry’s 12.5% rise.
Stocks to Consider
Here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.
Cheniere Energy, Inc. LNG, based in Houston, is engaged in businesses related to liquefied natural gas. The company has an Earnings ESP of +5.25% and flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Crude oil and refined products logistics and marketing assets are owned, operated, purchased and constructed by Delek Logistics Partners L.P. DKL. The partnership has an Earnings ESP of +0.63% and a Zacks Rank #1.
Occidental Petroleum Corporation (OXY - Free Report) is an international oil and gas exploration and production company. The company has an Earnings ESP of +1.75% and carries a Zacks Rank #2.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>