Chesapeake Granite Wash Trust :CHKR-US: Earnings Analysis: Q4, 2015 By the Numbers

Chesapeake Granite Wash Trust reports financial results for the quarter ended December 31, 2015.

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 5.51 million, Net Earnings of USD 11.33 million.
  • Narrowing of operating (EBIT) margins contributed to decline in earnings, despite some positive contribution from one-time items.

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

2014-12-31 2015-03-31 2015-06-30 2015-09-30 2015-12-31
Relevant Numbers (Quarterly)
Revenues (mil) 20.74 15.83 8.24 6.81 5.51
Revenue Growth (%YOY) -22.98 -39.87 -67.49 -71.16 -73.45
Earnings (mil) 17.81 15.76 13.67 12.55 11.33
Earnings Growth (%YOY) -23.86 -32.14 -39.57 -38.25 -36.37
Net Margin (%) 85.88 99.59 166.04 184.31 205.79
EPS 0.38 0.34 0.39 0.27 0.24
Return on Equity (%) 27.22 28.11 32.88 41.7 55.52
Return on Assets (%) 27.07 28.11 32.88 41.7 55.46

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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 -73.45% 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 -19.12% and earnings by -9.70% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Margins

The company’s earnings fell, largely because of the narrowing in operating margins, which decreased from 97.09% to 94.26%. The decline in earnings probably would have been worse, were it not for some one-time items that improved pretax margins from 85.88% to 205.79%.

EBIT Margin Versus PreTax Margin
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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