After reporting a fourth quarter loss that was slightly better than expected by analysts, Oklahoma City’s Chesapeake Energy Corp. saw its shares plunge 13.3% toward a record low in morning trading on Tuesday.
The major tumble came after Chief Executive Doug Lawler revealed plans were being laid for a reverse stock split in what to what he labeled as “very low levels” of price. It’s what he said in a conference call with analysts after the company made known its fourth-quarter results, in which losses were narrower than expected.\
However, the revenue also fell more than forecast and Lawler took note during his discussion.
“While we have stock prices fall into very low levels, we will commence actions to reverse split the number of shares with the filing of the proxy in a few weeks,” Lawler said, according to a FactSet transcript. Lawler also said “the challenging macro pricing environment” has “further deteriorated” in recent weeks, causing “a much softer commodity price outlook in 2020.”
Further deteriorated indeed….35.4% in the past three months. Chesapeake Energy reported a quarterly loss of $0.04 a share while at least one firm estimated the loss might be $0.06. A year ago, Chesapeak recorded an earning of 21-cents a share.
However, in the third quarter, Chesapeake reported a loss of 11-cents a share, slightly more than expected by the natural gas company.
Revenues for the fourth quarter ending December 2019 totaled $969 million, down from the $1.73 billion reported a year ago.
Chesapeake shares have lost about 46.2% since the beginning of the year versus the S&P 500’s decline of -3.2%.
Click here to view Chesapeake Energy quarterly release.