Chesapeake Corp. has been the center of attention of analysts as it is one of the most prominent equity firms that have received a serious blow in the financial market. The earnings of the company have been seen to drop by over a 50% due to the decline in oil prices in a period of 9 months. After the announcement of the 4Q earnings of the company, a dip of 10% in the share price was recorded.
On Wednesday, 25th February 2105, the oil field service providing company posted earnings for the quarter which did not meet expectations of analysts. The firm also declared that it plans to cut down on its capital expenditures and also curtail its 2015 rig count due to the extreme low price of oil.
Chesapeake Energy Corp (NYSE: CHK) reported its Q4 earnings which disappointed analysts profoundly. The company reported earnings of $586 million for the quarter with each share at a price of 81 cents. The firm earned $159 million in the Q4 earnings of 2013 which marks an eminent rise in the earnings for 4QFY14.
The Earning per Share for the last quarter of 2014 were reported to be just 11 cents which missed the prediction of analysts that they had made for the EPS at 23 cents.
It was a complete surprise to the investors when the company also announced that it will shorten its annual drilling rigs in 2015 to 35 to 45 only. This is reported to be the lowest number of rigs that the company has undergone before, seeing a decline of 38% or 64 rigs from 2014.
The oil services provider added in their report that they will also be cutting down on their expenditures and have decided to spend $4.00 billion to $4.5 billion for the purpose. This amount is noted to be 37% lower than the previous expenditures of the company that are around $6.7 billion on the record.
Despite the lower than expected earnings in the Q4, Chesapeake (NYSE:CHK) has given a guidance report for 2015 in which it mentioned that the firm is expected to produce 235 million to 240 million of oil barrels by the end of the current year, with an estimated production of 655,000 oil barrels daily. This is a significant improvement in the eyes of analysts as this will note a rise of 3% to 5% in production by the company.
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