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Why Chesapeake Energy’s 4Q15 Revenue Fell by ~49%

Keisha Bandz

Why Did Chesapeake Energy's Stock Rise after Its 4Q15 Miss?

Chesapeake Energy’s 4Q15 revenue

Chesapeake Energy (CHK) reported its 4Q15 earnings on February 24, 2016. The company announced adjusted revenue of ~$2.6 billion, in-line with consensus Wall Street estimates. Its 4Q15 revenue was ~49% lower than its 4Q14 revenue of ~$5.2 billion.

Chesapeake Energy’s 4Q15 earnings

CHK’s 4Q15 adjusted losses per share were $0.16, in-line with consensus Wall Street estimates. CHK’s 4Q14 earnings per share (or EPS) were ~$0.11.

CHK’s peers WPX Energy (WPX) and QEP Resources (QEP) reported 4Q15 losses per share of $0.20 and $0.01, respectively, versus estimated losses per share of ~$0.20 and $0.11, respectively.

Gulfport Energy (GPOR) reported 4Q15 losses per share of $0.01 versus estimated losses per share of $0.12. All these companies make up ~1% of the Vanguard Energy ETF (VDE).

Chesapeake Energy’s 2015 earnings and revenue

For 2015, CHK reported adjusted losses per share of $0.20. Its comparable earnings per share in 2014 were ~$1.5. Chesapeake Energy’s lower earnings can be blamed on natural gas prices, which fell to 16-year lows in 4Q15.

CHK’s 2015 revenue came in at ~$12.7 billion. Its comparable revenue in 2014 was ~$20.5 billion.

CHK’s proved reserves

CHK’s proved reserves at the end of 2015 were 1.5 billion barrels of oil equivalent. Its 4Q15 earnings release noted that the discounted value of its reserve base at the end of 2015 was $4.7 billion, versus $22 billion at the end of 2014.

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