Chesapeake Energy Corporation (NYSE: CHK) is a very complex company and is one of the top natural gas players out there. The earnings report is shocking on the surface, but the reaction is not very much of a shock with gas prices being so low.
It is probably not a surprise that Chesapeake was light on revenues, but the degree to which it missed is massive from an outside view. The company reported earnings at $0.58 EPS on an adjusted basis versus $0.59 estimates from Thomson Reuters. Revenues were a bust… $2.73 billion versus estimates of $3.05 billion expected. Missing estimates by 10% on the top-line??? Now you know just how bad the situation is with natural gas.
Average daily production was 3.596 Bcfe in the fourth quarter, but it has curtailed natural gas production by 1 BCF since January. Cutting that production is what is helping, as well as the outlook for production ahead.
The company noted that it sees 2012 natural gas production 1000 bcf to 1040 bcf, sees 2012 liquids production 53,000 mbbls to 57,000 mbbls, and sees 2012 nat-gas equivalent production 1318 bcfe to 1382 bcfe. For 2013 the company sees natural gas production of 1020 bcf to 1060 bcf and sees 2013 natrual gas equivalent production of 1,452 bcfe to 1,516 bcfe.
After closing down $0.09 at $24.62, the stock is actually up marginally in the after-hours session and the 52-week range is $20.41 to $35.95.
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