The 10-second takeaway
For the quarter ended Sep. 30 (Q3), Chesapeake Energy beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share shrank to a loss.
Margins dropped across the board.
Chesapeake Energy logged revenue of $2.97 billion. The 12 analysts polled by S&P Capital IQ expected to see a top line of $2.73 billion on the same basis. GAAP reported sales were 25% lower than the prior-year quarter's $3.98 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 $0.10. The 27 earnings estimates compiled by S&P Capital IQ averaged $0.09 per share. GAAP EPS were -$3.19 for Q3 against $1.22 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 38.5%, 1,520 basis points worse than the prior-year quarter. Operating margin was -106.0%, 14,340 basis points worse than the prior-year quarter. Net margin was -67.7%, 9,090 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.84 billion. On the bottom line, the average EPS estimate is $0.13.
Next year's average estimate for revenue is $11.02 billion. The average EPS estimate is $0.47.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 7,482 members out of 7,721 rating the stock outperform, and 239 members rating it underperform. Among 1,408 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 1,362 give Chesapeake Energy a green thumbs-up, and 46 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 $23.80.
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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, short JAN 2014 $15.00 puts 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.