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Chesapeake (CHK) Q2 Earnings Beat, Revenues Lag Estimates

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Chesapeake Energy Corporation (CHK - Free Report) reported second-quarter 2018 earnings per share (excluding special items) of 15 cents, which beat the Zacks Consensus Estimate of 14 cents. The company had reported adjusted earnings of 18 cents in the prior-year quarter.
 

Chesapeake Energy Corporation Price, Consensus and EPS Surprise

 

Chesapeake Energy Corporation Price, Consensus and EPS Surprise | Chesapeake Energy Corporation Quote

Total revenues amounted to $982 million, down from $1,279 million in the year-ago quarter. The top line also lagged the Zacks Consensus Estimate of $1,124 million.

The company’s second-quarter 2018 results declined due to higher operating costs, partially offset by higher oil equivalent price realizations.

Operational Performance

Chesapeake’s production in the reported quarter was approximately 48 million barrels of oil equivalent (MMBoe), unchanged year over year. Production comprised approximately 8 million barrels (MMbbls) of oil (flat year over year and up from the Zacks Consensus Estimate of 7.91 MMbbls), 210 billion cubic feet (bcf) of natural gas (up marginally but lagging the Zacks Consensus Estimate of 212 bcf) and 5 MMbbls of NGL (flat year over year and beating the Zacks Consensus Estimate of 4.82 MMbbls).

Oil equivalent realized price — including realized gains (losses) on derivatives —was $23.82 per barrel of oil equivalent compared with $22.42 in the year-ago quarter.

Total capital expenditure fell to $552 million from $620 million in the second quarter of 2017.

On the cost front, quarterly production expenses declined more than 2% year over year to $2.86 per Boe.

Expenses

Total second-quarter 2018 operating expense was $2,225 million, up 18.2% year over year.

Financials

At the end of the quarter, Chesapeake had cash balance of $3 million. Net long-term debt was $9,238 million.

Guidance

Chesapeake has lowered production guidance for 2018 to the range of 494,000-524,000 Boe per day from the previous range of 515,000-550,000 Boe per day. Moreover, the capital budget projection for 2018 is projected at $2,000-$2,300 million.

Q2 Price Performance

Chesapeake’s shares gained 73.5% of its value during the quarter compared with the 12.5% rally of the industry.



 

Zacks Rank and Key Picks

Chesapeake currently has a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Canadian Natural Resources Limited (CNQ - Free Report) , China Petroleum and Chemical Corporation , also known as Sinopec, and Sunrun Inc (RUN - Free Report) . All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Canadian Natural Resources, based in Calgary, Alberta, is an exploration and production (E&P) company. It pulled off an average positive earnings surprise of 4.7% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.

Sunrun is engaged in offering solar services through various channels. The company delivered an average positive earnings surprise of 16.3% in the last four quarters.

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