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GuruFocus has detected 6 Warning Signs with Chesapeake Energy Corp $CHK.
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Chesapeake Energy Corp (NYSE:CHK)
Retained Earnings
$-17,603 Mil (As of Dec. 2016)

Retained earnings is the accumulated portion of net income that is not distributed to shareholders. Chesapeake Energy Corp's retained earnings for the quarter that ended in Dec. 2016 was $-17,603 Mil.

Chesapeake Energy Corp's quarterly retained earnings declined from Jun. 2016 ($-15,873 Mil) to Sep. 2016 ($-17,028 Mil) and declined from Sep. 2016 ($-17,028 Mil) to Dec. 2016 ($-17,603 Mil).

Chesapeake Energy Corp's annual retained earnings declined from Dec. 2014 ($1,483 Mil) to Dec. 2015 ($-13,202 Mil) and declined from Dec. 2015 ($-13,202 Mil) to Dec. 2016 ($-17,603 Mil).


Retained Earnings is the accumulated portion of net income that is not distributed to shareholders. Because the net income was not distributed to shareholders, shareholders’ equity is increased by the same amount.

Of course, if a company loses, it is called retained losses, or accumulated losses.


Historically profitable companies sometimes have negative retained earnings. This is because they have cumulatively paid out more to shareholders than they reported in profits.

For example, in 2011, Microsoft had negative retained earnings. This does not mean the company lost more money than it made over the years. It just means it paid out more money than it earned.

If a company has negative retained earnings, investors should check the 10-year financial results. They should not assume that negative retained earnings prove a company has generally lost money in the past.

Of course, many companies with negative retained earnings have indeed lost money in the past.

Retained Earnings: Warren Buffett’s Secret.

One of the most important indicators of durable competitive advantage. Net earnings can be paid out as dividends, used to buy back shares or retained for growth.

If the company loses more than it has accumulated, retained earnings is negative.

If a company isn’t adding to its retained earnings, it isn’t growing its net worth.

Rate of growth of retained earnings is good indicator whether it’s benefiting from a competitive advantage.

Microsoft is negative because it chose to buyback stock and pay dividends.

The more earnings retained, the faster it grows and increases growth rate for future earnings.

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Chesapeake Energy Corp Annual Data

Retained Earnings 4,1504,694-1,2611901,6084376881,483-13,202-17,603

Chesapeake Energy Corp Quarterly Data

Retained Earnings 9451,483-2,256-6,364-11,017-13,202-14,123-15,873-17,028-17,603
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