The 10-second takeaway
For the quarter ended June 30 (Q2), Chesapeake Energy crushed expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue increased slightly and GAAP earnings per share improved significantly.
Gross margins improved, operating margins shrank, net margins expanded.
Chesapeake Energy reported revenue of $3.39 billion. The 10 analysts polled by S&P Capital IQ foresaw sales of $2.42 billion on the same basis. GAAP reported sales were 2.1% higher than the prior-year quarter's $3.32 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.06. The 28 earnings estimates compiled by S&P Capital IQ anticipated $0.09 per share. GAAP EPS of $1.29 for Q2 were 90% higher than the prior-year quarter's $0.68 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 53.3%, 650 basis points better than the prior-year quarter. Operating margin was 28.9%, 100 basis points worse than the prior-year quarter. Net margin was 28.7%, 1,330 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $2.37 billion. On the bottom line, the average EPS estimate is $0.04.
Next year's average estimate for revenue is $10.01 billion. The average EPS estimate is $0.41.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 7,532 members out of 7,776 rating the stock outperform, and 244 members rating it underperform. Among 1,326 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,282 give Chesapeake Energy a green thumbs-up, and 44 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 $22.83.
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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. The Motley Fool has the following options: long JAN 2013 $16.00 calls on Chesapeake Energy, long JAN 2013 $25.00 calls on Chesapeake Energy, long JAN 2014 $20.00 calls on Chesapeake Energy, and long JAN 2014 $30.00 calls on 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.