Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Chesapeake stock drops 12% on missed earnings

@CNNMoneyInvest May 2, 2012: 10:55 AM ET
Chesapeake Energy

Click on chart for more data on the company

NEW YORK (CNNMoney) -- Chesapeake Energy's stock price plunged after the opening bell on Wednesday, as investors reacted to dissappointing earnings released Tuesday after the close.

Chesapeake's (CHK, Fortune 500) stock price fell 12% in the first hour of trading.

On Tuesday, the natural gas company said it lost $71 million, or 11 cents per share, in the first quarter. Excluding certain items, Chesapeake said it earned $94 million, or 18 cents per share, in the quarter. Analysts surveyed by Thomson Reuters were expecting the company to report a profit of 28 cents per share.

Chesapeake, based in Oklahoma City, is second only to Exxon Mobil (XOM, Fortune 500) for drilling natural gas in the U.S. The company has been hurt by rock bottom prices for the fuel, which have declined 53% over the last year. In a conference call with analysts on Wednesday, Chesapeake executives said they were transitioning from natural gas to oil.

The company has also been wracked by a controversy regarding its chief executive officer, Aubrey McClendon, because of an incentive program that allowed him to take personal stakes in wells drilled by the company. The program came under fire last month following news that McClendon took out loans worth more than $1 billion against his personal stake in the company's wells. This raised concerns about a conflict of interest.

McClendon has managed to hold on to his job, however tenuous his position may be. His unpopularity among investors became obvious on Tuesday, when the stock went up about 6% after the company said its chief executive officer would give up his title as chairman of the board.

This follows last week's announcement by the company that McClendon agreed to terminate the controversial Founder Well Participation Program ahead of schedule, in June 2014.

"We are eager to leave behind the controversy of the last few weeks," said McClendon, in the call with analysts Wednesday.

But it remains to be seen whether the company can truly get past McClendon's controversy with the embattled CEO still at the helm. To top of page

Index Last Change % Change
Dow 24,386.03 56.87 0.23%
Nasdaq 6,875.08 35.00 0.51%
S&P 500 2,659.99 8.49 0.32%
Treasuries 2.39 0.00 0.08%
Data as of 7:46am ET
Company Price Change % Change
CenturyLink Inc 15.87 1.20 8.18%
Kinder Morgan Inc 17.96 0.17 0.96%
Mondelez Internation... 42.87 0.22 0.52%
Citigroup Inc 75.85 0.14 0.18%
KeyCorp 19.73 -0.16 -0.80%
Data as of Dec 11
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.83%3.88%
15 yr fixed3.15%3.20%
5/1 ARM3.54%3.55%
30 yr refi3.89%3.89%
15 yr refi3.13%3.18%
Rate data provided
by Bankrate.com
View rates in your area
Find personalized rates: