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Why Is Chesapeake (CHK) Up 6.1% Since Last Earnings Report?
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A month has gone by since the last earnings report for Chesapeake Energy (CHK - Free Report) . Shares have added about 6.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chesapeake due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Chesapeake Beats on Q4 Earnings & Revenues Estimates
Chesapeake Energyreported fourth-quarter 2018 earnings per share (excluding special items) of 21 cents, beating the Zacks Consensus Estimate of 17 cents. However, the bottom line declined from the year-ago quarter’s 30 cents.
Total revenues amounted to $1.7 billion, up from $1.3 billion in the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $1 billion.
Higher oil equivalent price realizations primarily led to the better-than-expected results. As a result, the stock rallied more than 9% in the pre-market trading hours. The outperformance was however partially offset by lower oil and natural gas production volumes and the rise in production expenses.
Operational Performance
Chesapeake Energy’s production in the reported quarter was approximately 43 million barrels of oil equivalent (MMBoe), down from 55 MMBoe a year ago. Production comprised approximately 8 million barrels (MMbbls) of oil (down 11.1% year over year), 185 billion cubic feet (bcf) of natural gas (down 22.6%) and 4 MMbbls of natural gas liquids (NGL) (down 20%).
Oil equivalent realized price — exclusive of unrealized gains (losses) on derivatives — was $26.75 per barrel of oil equivalent, higher than $24.41 in the year-ago quarter.
Total capital expenditure increased to $541 million from $523 million in the fourth quarter of 2017.
On the cost front, quarterly production expenses increased more than 14% year over year to $2.87 per Boe.
Financials
At the end of the quarter, Chesapeake Energy had cash balance of $4 million. Net long-term debt was $7,341 million.
Guidance
The company issued production guidance for 2019 in the range of 475,000-505,000 Boe per day. Moreover, the company projects capital budget for 2019 at $2,300-$2,500 million.
Proved Reserves Decline
As of Dec 31, 2018, the company’s proved reserves were reported at 1,448 MMBoE, down from 1,912 MMBoE as of Dec 31, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -22.43% due to these changes.
VGM Scores
Currently, Chesapeake has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Chesapeake has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Chesapeake (CHK) Up 6.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Chesapeake Energy (CHK - Free Report) . Shares have added about 6.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chesapeake due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Chesapeake Beats on Q4 Earnings & Revenues Estimates
Chesapeake Energyreported fourth-quarter 2018 earnings per share (excluding special items) of 21 cents, beating the Zacks Consensus Estimate of 17 cents. However, the bottom line declined from the year-ago quarter’s 30 cents.
Total revenues amounted to $1.7 billion, up from $1.3 billion in the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $1 billion.
Higher oil equivalent price realizations primarily led to the better-than-expected results. As a result, the stock rallied more than 9% in the pre-market trading hours. The outperformance was however partially offset by lower oil and natural gas production volumes and the rise in production expenses.
Operational Performance
Chesapeake Energy’s production in the reported quarter was approximately 43 million barrels of oil equivalent (MMBoe), down from 55 MMBoe a year ago. Production comprised approximately 8 million barrels (MMbbls) of oil (down 11.1% year over year), 185 billion cubic feet (bcf) of natural gas (down 22.6%) and 4 MMbbls of natural gas liquids (NGL) (down 20%).
Oil equivalent realized price — exclusive of unrealized gains (losses) on derivatives — was $26.75 per barrel of oil equivalent, higher than $24.41 in the year-ago quarter.
Total capital expenditure increased to $541 million from $523 million in the fourth quarter of 2017.
On the cost front, quarterly production expenses increased more than 14% year over year to $2.87 per Boe.
Financials
At the end of the quarter, Chesapeake Energy had cash balance of $4 million. Net long-term debt was $7,341 million.
Guidance
The company issued production guidance for 2019 in the range of 475,000-505,000 Boe per day. Moreover, the company projects capital budget for 2019 at $2,300-$2,500 million.
Proved Reserves Decline
As of Dec 31, 2018, the company’s proved reserves were reported at 1,448 MMBoE, down from 1,912 MMBoE as of Dec 31, 2017.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -22.43% due to these changes.
VGM Scores
Currently, Chesapeake has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Chesapeake has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.