Chesapeake earnings miss expectations

Chesapeake's stock price tumbled in after-hours trading after the company announced a first-quarter profit of 18 cents a share, missing expectations by 10 cents a share.
by Adam Wilmoth Published: May 1, 2012
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Chesapeake Energy Corp. on Tuesday reported a net loss of $71 million, or 11 cents per share, in the first quarter.

Excluding the $167 million loss the company took from its hedging positions, Chesapeake had an adjusted first-quarter profit of $94 million, or 18 cents per share, missing analyst expectations by 10 cents.

The profit compared to an adjusted net gain of $394 million, or 75 cents a share, in the first quarter of 2011.

The company reported revenue of $2.42 billion, which also missed expectations of $2.71 billion.

Chesapeake's stock price tumbled in after-hours trading, erasing much of the day's strong gains.

Chesapeake shares added $1.16, or 6.3 percent, on the day to close at $19.60, after the company announced it would appoint an independent chairman in place of CEO Aubrey McClendon. As of 5:30 p.m., the stock price had lost 91 cents, or 4.6 percent in after-hours trading.

“What a whipsaw day for Chesapeake shareholders. The market giveth and the market taketh away,” said Jake Dollarhide, CEO of Longbow Asset Management Co. of Tulsa.

Chesapeake — along with other energy producers — has been hit by plummeting natural gas prices, which settled at $2.37 per thousand cubic feet on Tuesday, down from $4.98 one year ago.

“We're at what seemingly is an unending bear market for natural gas,” Dollarhide said. “The glut and continued low-price environment has put a lot of pressure on all natural gas companies, not just Chesapeake. Chesapeake once boasted of being 100 percent natural gas. You can't change your product mix overnight.”

Chesapeake reported an average sales price of $2.35 per thousand cubic feet in the first quarter.

Chesapeake's total daily production increased to 3.66 billion cubic feet of natural gas equivalent on the quarter, up from nearly 3.11 billion cubic feet per day in the year-ago period.

The company's production of oil and natural gas liquids increased to 19 percent of its total production in the first quarter of 2012, up from 13 percent one year ago.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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