Chesapeake Granite Wash Trust :CHKR-US: Earnings Analysis: Q3, 2016 By the Numbers : November 29, 2016

Chesapeake Granite Wash Trust reports financial results for the quarter ended September 30, 2016.

We analyze the earnings along side the following peers of Chesapeake Granite Wash Trust – Freeport-McMoRan, Inc. (FCX-US) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of USD 2.61 million, Net Earnings of USD 2.57 million.
  • Earnings declined although operating margins improved from 94.80% to 98.70%.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016-09-30 2016-06-30 2016-03-31 2015-12-31 2015-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 2.61 2.35 4.08 5.51 6.81
Revenue Growth (%YOY) -61.69 -71.41 -74.23 -73.45 -71.16
Earnings (mil) 2.57 1.41 5.49 11.33 12.55
Earnings Growth (%YOY) -79.49 -89.67 -65.15 -36.37 -38.25
Net Margin (%) 98.7 59.98 134.67 205.79 184.31
EPS 0.06 0.03 0.12 0.24 0.27
Return on Equity (%) 27.06 12.96 40.96 55.52 41.7
Return on Assets (%) 27.06 12.96 40.9 55.46 41.7

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Market Share Versus Profits

Revenues History
Earnings History

CHKR-US‘s change in revenue this period compared to the same period last year of -61.69% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that CHKR-US is holding onto its market share. Also, for comparison purposes, revenues changed by 10.79% and earnings by 82.29% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Margins

Despite an overall improvement in operating (EBIT) margins, the company’s earnings fell. EBIT margins went from 94.80% to 98.70%. The decline in earnings appears to be largely because of one-time items. Pretax margins declined from 184.31% to 98.70%.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Chesapeake Granite Wash Trust engages in the ownership of royalty interests. It owns royalty interests in oil, natural gas liquids and natural gas properties located in Washita County, Oklahoma producing from the colony granite wash play within the broader granite wash formation of the anadarko basin. The company was founded on June 29, 2011 and is headquartered in Austin, TX.

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