Chesapeake Energy Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Chesapeake Energy (NYS: CHK) reported earnings on Aug. 6. Here are the numbers you need to know.

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.

Revenue details
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 details
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.

Margin details
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.

Looking ahead
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.

Investor sentiment
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.

The article Chesapeake Energy Increases Sales but Misses Estimates on Earnings originally appeared on Fool.com.

Seth Jaysonhad no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley 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.

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