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Chesapeake Energy 4Q2014 earnings miss estimates

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4Q2014 earnings overview

Chesapeake Energy (CHK) reported its 4Q2014 earnings on February 25, 2015. The company reported adjusted net income of $34 million or $0.11 per share. In the corresponding period last year, Chesapeake had reported $161 million in adjusted net income or $0.27 per share.

These figures were significantly lower than Wall Street estimates. Analysts had pegged earnings at $0.24 per share on revenue of $4.5 billion.

Here’s how CHK compares with some of its peers this quarter:

  • Southwest Energy (SWN) – earnings of $0.52 per share versus market estimates of $0.50 per share
  • Range Resources (RRC) – earnings of $0.39 per share versus estimates of $0.28 per share
  • Cabot Oil & Gas (COG) – earnings of $0.23 per share versus estimates of $0.22 per share

These companies, along with Chesapeake, combine to make up ~4% of the Energy Select Sector SPDR ETF (XLE).

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Revenue

Despite the earnings miss, Chesapeake Energy beat its revenue estimates. Total revenues for the quarter came in at $5.05 billion, topping analyst estimates as shown in the graph above.

On a year-over-year basis, revenues were 11% higher. Of the company’s total revenues, the sale of oil, gas, and NGLs (natural gas liquids) accounted for ~$2.37 billion compared to $1.6 billion in the corresponding period last year. Better realized and unrealized hedge gains, which came in at $1.05 billion, were the main contributors to this increase.

Adjusting for these realized and unrealized hedge gains, total oil, gas, and NGL sales would have declined ~19% year-over-year.

Of the remaining revenues, $2.68 billion came from marketing, gathering, and compression proceeds.

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