Chesapeake narrows 2Q loss on cost cuts

By The Associated Press

Chesapeake Energy Corp. on Thursday reported a narrower second-quarter loss as it cut costs by writing off oil and gas assets. Weak commodity prices drove down revenue.

 

NEW YORK (AP) — Chesapeake Energy Corp. on Thursday reported a narrower second-quarter loss as it cut costs by writing off oil and gas assets. Weak commodity prices drove down revenue.

The Oklahoma City-based company lost $1.75 billion, or $2.48 per share, compared with a loss of $4.15 billion, or $6.27 per share, a year prior. Losses, adjusted for asset impairment costs and non-recurring costs, came to 14 cents per share.

The results fell short of Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for a loss of 9 cents per share.

Overall revenue plunged 54 percent to $1.62 billion as weak commodity prices continue to weigh on the energy industry. The natural gas company reported a 64 percent drop to $440 million in revenue from oil and natural gas, which fell short of expectations, with six analysts surveyed by Zacks expecting $970.3 million.

The company has slashed spending, sold assets and cut jobs to account for plunging energy prices. It also ended dividend payments for its preferred stock to save money. Operating expenses plunged 63 percent as result of cost-cutting measures.

"Financial discipline remains our top priority, and we continue to work toward additional solutions to improve our liquidity, reduce our midstream commitments and enhance our margins," said CEO Doug Lawler, in a statement.

Chesapeake shares fell 16 cents, or 3.1 percent, to $5.13 in morning tradng. Its have climbed 18 percent since the beginning of the year, while the Standard & Poor's 500 index has increased nearly 6 percent. The stock has dropped 36 percent in the last 12 months.

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