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July 21, 2019, 10:52 a.m. EDT

Chesapeake Energy’s stock falls to 20-year low, Kinder Morgan’s drops after earnings

Crude oil prices sink again, Kinder Morgan misses on profit and revenue

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By Tomi Kilgore, MarketWatch


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Shares of Kinder Morgan Inc. dropped Thursday in active trading, dragged down by a disappointing earnings report and a selloff in crude oil and natural gas prices.

The weakness in oil and gas prices also helped fuel an early selloff in energy stocks, before they bounced later in the session, while Chesapeake Energy Corp. shares /zigman2/quotes/201364537/composite CHK -1.16% tumbled on heavy volume to close at a 20-year low.

The SPDR Energy Select Sector exchange-traded fund /zigman2/quotes/206420077/composite XLE +1.33%  fell as much as 1.1% in intraday trading, before bouncing to close up less than 0.1% amid a rally in the broader stock market. The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.42%  rose 0.4%.

The most-active component of the energy ETF (XLE) was Kinder Morgan’s stock /zigman2/quotes/208455654/composite KMI +1.20% , which dropped 0.8% on volume of 23.6 million shares.

The company energy infrastructure company with a concentration in natural gas transportation missed profit expectations for the third time in four quarters, and missed on revenue for a sixth straight quarter.

/zigman2/quotes/208455654/composite KMI 20.26, +0.24, +1.20%

Kinder Morgan swung to net income of $518 million, or 23 cents a share, from a loss of $180 million, or 8 cents a share, in the same period a year ago, which included non-cash impairments. Excluding non-recurring items, adjusted earnings per share rose to 22 cents from 21 cents, but was below the FactSet consensus of 24 cents.

Revenue declined 6.2% to $3.21 billion, below the FactSet consensus of $3.60 billion.

Analyst Selman Akyol at Stifel Nicolaus recommended investors stay on the sidelines following the earnings miss, but said the stock would look “more attractive” if the price fell below $20.

On the post-earnings conference call with analysts, Executive Chairman and namesake Richard Kinder expressed optimism about the company’s outlook, as he was “very bullish” on the future of natural gas.

“Now, look, I’m aware of Mark Twain’s saying that making predictions is very difficult, particularly when they concern the future,” Kinder said, according to a transcript provided by FactSet. “But I believe that under almost any scenario, natural gas is a winner for years to come.”

Helping offset Kinder’s optimism, crude oil futures slid 2.6%, after data showing U.S. crude supplies declined much less than expected while petroleum products increased. Prices have now tumbled 8.2% amid a four-session losing streak.

Don’t miss : U.S. oil prices drop to lowest levels in a month.

Natural-gas futures declined 0.4%, and have also declined for four straight days, and were hovering less than 6% above a 3-year low hit last month.

In other active energy stocks, Chesapeake Energy shares tumbled 7.1% to close Thursday at $1.58, the lowest close since 1999. Trading volume swelled to 79.2 million shares, enough to make the stock the most actively traded on major U.S. exchanges.

/zigman2/quotes/201364537/composite CHK 1.28, -0.01, -1.16%

Chesapeake’s stock had tumbled over 46% in the past three months, while crude oil futures have shed 14%, the XLE has lost 7.0% and the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.42%  has gained 3.1%.

Elsewhere, shares of Apache Corp. /zigman2/quotes/200648444/composite APA +2.16%  shed 3.8%, Halliburton Co. /zigman2/quotes/210488727/composite HAL +6.19%  gave up 0.5%and Exxon Mobil Corp. /zigman2/quotes/204455864/composite XOM +1.55%  slid 0.9%, while Schlumberger N.V. /zigman2/quotes/201012972/composite SLB +2.88%  gained 0.4% and Marathon Oil Corp. /zigman2/quotes/205031829/composite MRO +0.31%  climbed 1.2%.

/zigman2/quotes/201364537/composite
US : U.S.: NYSE
$ 1.28
-0.01 -1.16%
Volume: 5.01M
Oct. 21, 2019 10:02a
P/E Ratio
2.45
Dividend Yield
N/A
Market Cap
$2.10 billion
Rev. per Employee
$4.37M
loading...
/zigman2/quotes/206420077/composite
US : U.S.: NYSE Arca
$ 57.79
+0.76 +1.33%
Volume: 1.04M
Oct. 21, 2019 10:02a
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,998.78
+12.58 +0.42%
Volume: 225.35M
Oct. 21, 2019 10:02a
loading...
/zigman2/quotes/208455654/composite
US : U.S.: NYSE
$ 20.26
+0.24 +1.20%
Volume: 2.02M
Oct. 21, 2019 10:02a
P/E Ratio
22.34
Dividend Yield
4.92%
Market Cap
$45.32 billion
Rev. per Employee
$1.30M
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,998.78
+12.58 +0.42%
Volume: 225.35M
Oct. 21, 2019 10:02a
loading...
/zigman2/quotes/200648444/composite
US : U.S.: NYSE
$ 22.67
+0.48 +2.16%
Volume: 340,958
Oct. 21, 2019 10:02a
P/E Ratio
N/A
Dividend Yield
4.42%
Market Cap
$8.44 billion
Rev. per Employee
$2.15M
loading...
/zigman2/quotes/210488727/composite
US : U.S.: NYSE
$ 19.57
+1.14 +6.19%
Volume: 5.60M
Oct. 21, 2019 10:02a
P/E Ratio
12.81
Dividend Yield
3.70%
Market Cap
$16.14 billion
Rev. per Employee
$399,917
loading...
/zigman2/quotes/204455864/composite
US : U.S.: NYSE
$ 68.66
+1.05 +1.55%
Volume: 948,534
Oct. 21, 2019 10:02a
P/E Ratio
16.53
Dividend Yield
5.07%
Market Cap
$286.07 billion
Rev. per Employee
$3.93M
loading...
/zigman2/quotes/201012972/composite
US : U.S.: NYSE
$ 33.24
+0.93 +2.88%
Volume: 1.50M
Oct. 21, 2019 10:02a
P/E Ratio
N/A
Dividend Yield
6.02%
Market Cap
$44.69 billion
Rev. per Employee
$328,150
loading...
/zigman2/quotes/205031829/composite
US : U.S.: NYSE
$ 11.34
+0.04 +0.31%
Volume: 1.16M
Oct. 21, 2019 10:02a
P/E Ratio
9.62
Dividend Yield
1.76%
Market Cap
$9.09 billion
Rev. per Employee
$2.46M
loading...

Tomi Kilgore is MarketWatch's deputy investing and corporate news editor and is based in New York. You can follow him on Twitter @TomiKilgore.

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