Getting Ready for Chesapeake Energy’s 2Q16 Earnings



Chesapeake Energy’s 2Q16 revenue estimates

Chesapeake Energy (CHK) is expected to release its 2Q16 earnings results on August 4, 2016. Chesapeake Energy’s 2Q16 revenue estimates are mostly lower than its revenue for the previous quarters.

For 2Q16, its revenue estimate is ~$2.0 billion. That’s ~35% lower than its 2Q15 revenue and ~0.6% higher than its 1Q16 revenue.

The above graph shows that Chesapeake Energy’s revenues had missed estimates in the previous quarter. Investors should watch to see if this trend continues in 2Q16.

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Chesapeake Energy’s 2Q16 earnings estimates

Chesapeake Energy’s 2Q16 EPS (earnings per share) estimate is -$0.11. Its 1Q16 earnings per share was -$0.10. The company’s earnings per share in 2Q15 was -$0.11.

Chesapeake Energy’s peers Cabot Oil & Gas (COG) and EQT (EQT) are expected to report earnings per share of -$0.07 and -$0.44, respectively, in 2Q16. These companies make up 6.2% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

Key update

In its 1Q16 earnings release, CHK noted that it had agreed to sell a portion of its acreage in the STACK play in northern Oklahoma to Newfield Exploration (NFX) for ~$470 million. Assets sold include ~42,000 net acres and 400 producing wells.

Chesapeake Energy is planning asset sales worth $1.2 billion–$1.7 billion for 2016.

CHK’s 2015 revenue and earnings recap

For 2015, CHK reported adjusted EPS of -$0.20. Its comparable EPS in 2014 came in at $1.50. Chesapeake Energy’s lower earnings can be blamed on natural gas prices, which fell to 16-year lows in 4Q15.

CHK’s 2015 revenue came in at ~$12.7 billion. Its comparable revenue in 2014 was ~$20.5 billion.


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