Chesapeake Energy Earnings Slide But Top Forecasts

Chesapeake Energy said late Tuesday it earned $346M ($0.72/share), down 34% from the $523M ($1.13/share) reported a year earlier, hurt by lower natural gas prices, even though production climbed 27%. The average price realized for natural gas fell to $7.41/mcf from $8.39/mcf, last year. Excluding items, earnings were $330M ($0.69/share). Revenue for the quarter was $2.03B, up from $1.93B in the 2006 quarter. Analysts had expected the natural gas producer to post earnings of $0.60/share on revenue of $1.65B, on average, according to Thomson. Daily production during the quarter rose to an average of 2.026 billion cubic feet equivalent from 1.597 bcfe in the 2006 quarter. Looking ahead, the company raised its production guidance, saying it now sees growth of 21%-23% for 2007 and 18%-22% for 2008, rather than its previous views of 18%-22%, 14%-18%, respectively. It reaffirmed its outlook for 2009 production growth of 12%-16%. It expects proved reserves to grow by 20%-25% to about 11 trillion cubic feet equivalent this year and boosted its year-end 2008 and 2009 expectations to 12.5-13 tcfe and 14-15 tcfe from 12 tcfe and 13 tcfe, respectively, previously. Shares edged up 0.4% to $40.85 AH, after climbing 2.6% ahead of the results.

Sources: Press release, Reuters, MarketWatch
Commentary: Chesapeake 3Q Easily Beats Numbers; Guides Up Again • Is Chesapeake Energy Selling Assets For More Drilling?
Stocks to watch: CHK. Competitors: APC, BP, COP. ETFs: IEO, PUW
Earnings call transcript: Chesapeake Energy Q2 2007

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