Chesapeake Energy Earnings Preview For The Third Quarter

Chesapeake Energy Corporation (NYSE:CHK) will be coming up with its latest quarterly earnings on Thursday, November 1, 2012. The oil company, which explores and develops properties for the production of crude oil and natural gas from underground reservoirs, is expected a profit of 9 cents per share, a decline of 87.5 percent for the same quarter a year ago.

Analyst’s average estimate for the quarter has moved up by 3 cents and has stood still at 9 cents for the past one month.  For the full year, analysts are expecting a net income of 46 cents per share, a decline of 83.6 percent from last year. The oil company has been missing the estimates for the last two quarters; in the second quarter company reported a profit of 6 cents against an estimate of net income of 8 cents per share and for the first quarter company fell short by 11 cents.

Chesapeake Energy Earnings Preview For The Third Quarter

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For the second quarter, Chesapeake Energy Corporation (NYSE:CHK) reported a rise in profits by 90.6 percent to 972 million ($1.29 a share) from $510 million (68 cents a share) the year earlier, while revenues for the quarter climbed 2.1 percent $3.39 billion from $3.32 billion. For the third quarter, analysts expect a decline of 38.9 percent in revenue from the year earlier quarter to $2.43 billion.

Chesapeake Energy Corporation (NYSE:CHK)’s stock price witnessed one of its best run over the last year between May 17, 2012 and May 31, 2012, with stock rising for 10 straight days, gaining 24.7 percent (+$3.35) over that span. Between November 11, 2011 and November 25, 2011, company’s shares experienced its worst periods, falling for 10 straight days, dropping 15.2 percent (-$4.03) over that span. For most of the third quarter, between August 2, 2012 and October 26, 2012, its stock gained $2.17 (12.1%), from $17.93 to $20.10.

For the upcoming earnings announcement, company will be hoping for four-straight quarterly revenue increases. Revenue rose 54.1 percent in the third quarter of the last fiscal year, 38.1 percent in the fourth quarter of the last fiscal year and 50.1 percent in the first quarter before increasing again in the second quarter. 18 out of 28 analysts have given a ‘hold’ rating to the stock. Company’s current ratio, an indicator of a firm’s liquidity and ability to meet creditor demands, for the last quarter was 0.72, which is below average as a ratio less than one could indicate a company may have difficulty meeting current obligations.