Chesapeake Energy Corporation (NYSE: CHK) had plenty of news to share recently, when it issued its earnings report in after-hours last night. Not only did the company beat analyst expectations on both the top and bottom line, the company announced an acquisition that led to further excitement among investors. Today, we’ll talk about:
- The earnings report;
- the acquisition;
- what we’re seeing from CHK stock as a result; and
- what we’ll be watching for ahead.
CHK Beats On Earnings
As mentioned above, Chesapeake Energy is having a strong start to the trading session this morning after releasing its earnings report and announcing an acquisition. In terms of earnings, the company did incredibly well. Here’s what we saw from the report:
- Earnings Per Share – When it comes to EPS, CHK beat expectations. The company said that it earned $0.19 per share in the quarter, beating expectations of EPS at $0.12.
- Revenue – The company also did incredibly well when it comes to revenue. During the quarter, the company generated revenue of $1.199 billion, not only growing from $979 million last year, but beating expectations of $1.16 billion in the process.
The Wildhorse Acquisition
Along with earnings, CHK announced that it has agreed to acquire Wildhorse Resource Development in a cash and stock deal. The total deal comes to a value of $3 billion. Chesapeake also agreed to assume $930 million in net debt owed by Wildhorse, bringing the total value of the acquisition to nearly $4 billion.
What We’re Seeing From The Stock
Shortly after the release of the earnings report, CHK started to fall. It seems as though, even with the earnings beat in the minds of investors, some got nervous about the $4 billion spent to acquire Wildhorse. Nonetheless, as investors dig into the massive amount of assets that Chesapeake Energy gained through the acquisition, fears are subsiding and the stock is headed up at the moment. Currently (11:01), CHK is trading at $3.54 per share after a gain of $0.27 per share or 8.27% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CHK. In particular, we’re interested in following the story surrounding the company’s continued work to take advantage of the changing environment in the oil and energy sector. We’re also watching to see how revenue does with the additional Wildhorse assets now on the playing field. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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