Chesapeake Energy Whiffs on Revenues

Chesapeake Energy (NYSE: CHK  ) reported earnings on Feb. 21. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Chesapeake Energy whiffed on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share expanded significantly.

Gross margins contracted, operating margins improved, net margins expanded.

Revenue details
Chesapeake Energy recorded revenue of $2.73 billion. The 12 analysts polled by S&P Capital IQ predicted revenue of $3.05 billion on the same basis. GAAP reported sales were 38% higher than the prior-year quarter's $1.98 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $0.58. The 28 earnings estimates compiled by S&P Capital IQ predicted $0.58 per share on the same basis. GAAP EPS of $0.63 for Q4 were 80% higher than the prior-year quarter's $0.35 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 38.4%, 130 basis points worse than the prior-year quarter. Operating margin was 12.4%, 350 basis points better than the prior-year quarter. Net margin was 17.3%, 600 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.98 billion. On the bottom line, the average EPS estimate is $0.43.

Next year's average estimate for revenue is $12.07 billion. The average EPS estimate is $1.97.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 7,474 members out of 7,671 rating the stock outperform, and 199 members rating it underperform. Among 1,634 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,601 give Chesapeake Energy a green thumbs-up, and 33 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Chesapeake Energy is outperform, with an average price target of $34.55.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On February 23, 2012, at 10:25 AM, skyisfalling wrote:

    I am only glad that CHK earned anything and I don't understand why a company like CHK with at least $2.00 eps is not appreciated by the market properly. I looked at the balance sheet and saw long term debt of about $12 b but has enough of interest coverage.

    Thank you for this ye peeing news analysis of CHK's earnings.

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