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Chesapeake (CHK) Q4 Earnings Beat Estimates, Revenues Miss
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Chesapeake Energy Corporation (CHK - Free Report) reported fourth-quarter 2019 loss per share (excluding special items) of 4 cents, narrower than the Zacks Consensus Estimate of a loss of 6 cents. However, in the year-ago quarter, the company had reported a profit of 3 cents.
Operating revenues amounted to $969 million, down from $1,731 million in the year-ago quarter. Moreover, the top-line missed the Zacks Consensus Estimate of $1,212 million.
The narrower-than-expected loss was a result of higher oil equivalent production. Lower price realizations of commodities partially offset the positive.
Chesapeake Energy Corporation Price, Consensus and EPS Surprise
Chesapeake’s production in the reported quarter was approximately 44 million barrels of oil equivalent (MMBoe), up from 43 MMBoe a year ago. The total production comprised 12 million barrels (MMbbls) of oil (up 50% year over year), 178 billion cubic feet of natural gas (down 4%) and 3 MMbbls of natural gas liquids or NGLs (down 25%).
Price Realizations Plunge
Oil equivalent realized price — exclusive of gains (losses) on derivatives — was $25.17 per barrel, down from $29.64 a year ago. Oil price was $57.48 per barrel, down from $62.98 in the year-ago quarter. Moreover, natural gas prices declined to $2.24 per thousand cubic feet from the year-ago level of $3.59. Average sales price of NGLs was recorded at $16.05 per barrel in the quarter compared with $25.11 a year ago.
Operating Expenses
Total operating costs in the fourth quarter declined to $2,099 million from $2,375 million in the prior-year quarter. However, quarterly production expenses per Boe increased to $2.86 from $2.48 in the year-ago period.
Capital Expenditure
Total capital expenditure increased to $487 million in the fourth quarter from $476 million in the year-ago quarter, primarily due to a rise in drilling and completion capital spending.
Balance Sheet
At the end of the quarter under review, Chesapeake had a cash balance of $6 million. Net long-term debt was $9,073 million, leading to a debt-to-capitalization ratio of 67.3%.
Guidance
Chesapeake expects oil equivalent production for 2020 in the range of 161 to 173 MMBoE. Notably, in 2020, the company is planning to invest capital in the range of $1,325 to $1,625 million.
Marathon Oil is likely to see earnings growth of 7.8% in the next five years, higher than the industry’s 7%.
Chevron’s bottom line for 2020 is expected to rise 12.8% year over year.
Hess’ bottom line for 2020 is likely to grow 93.7% year over year.
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Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Chesapeake (CHK) Q4 Earnings Beat Estimates, Revenues Miss
Chesapeake Energy Corporation (CHK - Free Report) reported fourth-quarter 2019 loss per share (excluding special items) of 4 cents, narrower than the Zacks Consensus Estimate of a loss of 6 cents. However, in the year-ago quarter, the company had reported a profit of 3 cents.
Operating revenues amounted to $969 million, down from $1,731 million in the year-ago quarter. Moreover, the top-line missed the Zacks Consensus Estimate of $1,212 million.
The narrower-than-expected loss was a result of higher oil equivalent production. Lower price realizations of commodities partially offset the positive.
Chesapeake Energy Corporation Price, Consensus and EPS Surprise
Chesapeake Energy Corporation price-consensus-eps-surprise-chart | Chesapeake Energy Corporation Quote
Operational Performance
Total Production Increases
Chesapeake’s production in the reported quarter was approximately 44 million barrels of oil equivalent (MMBoe), up from 43 MMBoe a year ago. The total production comprised 12 million barrels (MMbbls) of oil (up 50% year over year), 178 billion cubic feet of natural gas (down 4%) and 3 MMbbls of natural gas liquids or NGLs (down 25%).
Price Realizations Plunge
Oil equivalent realized price — exclusive of gains (losses) on derivatives — was $25.17 per barrel, down from $29.64 a year ago. Oil price was $57.48 per barrel, down from $62.98 in the year-ago quarter. Moreover, natural gas prices declined to $2.24 per thousand cubic feet from the year-ago level of $3.59. Average sales price of NGLs was recorded at $16.05 per barrel in the quarter compared with $25.11 a year ago.
Operating Expenses
Total operating costs in the fourth quarter declined to $2,099 million from $2,375 million in the prior-year quarter. However, quarterly production expenses per Boe increased to $2.86 from $2.48 in the year-ago period.
Capital Expenditure
Total capital expenditure increased to $487 million in the fourth quarter from $476 million in the year-ago quarter, primarily due to a rise in drilling and completion capital spending.
Balance Sheet
At the end of the quarter under review, Chesapeake had a cash balance of $6 million. Net long-term debt was $9,073 million, leading to a debt-to-capitalization ratio of 67.3%.
Guidance
Chesapeake expects oil equivalent production for 2020 in the range of 161 to 173 MMBoE. Notably, in 2020, the company is planning to invest capital in the range of $1,325 to $1,625 million.
Zacks Rank & Stocks to Consider
Chesapeake currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy sector include Marathon Oil Corp. (MRO - Free Report) , Chevron Corp. (CVX - Free Report) and Hess Corp. (HES - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Marathon Oil is likely to see earnings growth of 7.8% in the next five years, higher than the industry’s 7%.
Chevron’s bottom line for 2020 is expected to rise 12.8% year over year.
Hess’ bottom line for 2020 is likely to grow 93.7% year over year.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>