Chesapeake Energy Corporation (NYSE: CHK) is scheduled to report its financial results for the third quarter of fiscal year 2016 during the pre-market hours on November 3. In this article, you will have an idea on what to look for in the financial results of the company.
When Chesapeake sheds some light on its guidance, market participants should closely keep an eye on its transportation expenses, general & administrative costs, and production expenses. The petroleum and natural gas exploration and production corporation has done pretty well in terms of reducing its operational costs together with its overall production expenses. Moreover, investors must also watch the Oklahoma-based company’s capital expenditure guidance.
The mentioned aspects are important because amid a depressed crude oil price environment and extreme market uncertainty, lowering costs is very important for improving investors’ confidence.
In addition, the debt situation of Chesapeake must also be closely monitored during its earnings report. According to a latest update by the company, the energy company asserted that it has closed on a term loan amounting to $1.25 billion,
The company has also paid down its credit facility to $0. At present, Chesapeake is holding approximately $1 billion in cash and cash equivalents. Given the fact that the Oklahoma-based energy corporation might opt for new debt in the future, investors could anticipate Chesapeake to buy back its debt in the long run if there seems to be a significant difference between the costs related with buying the debt and debt servicing.
According to Wall Street analysts, Chesapeake will report an average earnings per share of around $-0.03. The analysts’ higher estimate stands at $0.02 per share, while their lowest estimate posts at $-0.10 per share.
Meanwhile, the average revenue forecast for the third quarter clocks in at $2.18 billion, with the lowest forecast at $2.02 billion and the highest projection at $2.42 billion. During the latest financial results of the energy company, Chesapeake posted earnings per share of $-0.14, against the $-0.11 earnings per share expectation of market experts. This figure reflects earnings of approximately -27.3 percent.
On a year to date basis, the Oklahoma-based corporation’s stock performance presents a significant return of 18.75 percent. Yet, investors were concerned about the company because in the past month, the CHK stock has plunged by 16.67 percent. The financial results of Chesapeake for the third quarter of fiscal year 2016 will definitely be watched closely by investors as it will shed some light on the future performance of the stock.
As of 11:01 AM GMT-4 on November 2, CHK shares are changing hands at $5.16, down by 3.64 percent or 0.20 points.