Chesapeake Energy (nyse:CHK) $44.16- Chesapeake Energy announced 4th quarter and full year earnings Thursday after the close. For Q4, EPS came in at $.93 / diluted share and $3.21 / diluted share for full year 2007. Analysts expected $.81 and $3.06, respectively. Profit was down year over year due to lower natural gas prices, realized selling price was $8.43 versus $9.11 a year earlier. I recommended CHK back in July when I wrote this analysis: CHK- Follow the Smart Money.

It’s confounding that the 25-30 analysts that follow CHK consistently underestimate quarterly EPS results. CHK has beaten estimates for 21 straight quarters; the average surprise is 14.5%. The question is why are the analysts consistently off the mark? 21 periods in a row?

I know that forecasting earnings is a tough task as no one can accurately predict the future. But, for the past several quarters I have calculated my own estimates and my accuracy has range from hitting the number to being of a few cents. For 4Q07, released Thursday after the bell, the consensus was $.81, my estimate was $.91. and the actual came in at $.93. The analysts were off 12 cents.

Is it that I am a prolific forecaster? No, it’s because the numbers are out there. CHK doesn’t provide revenue and earnings guidance, but they do provide production and expense forecasts. CHK Outlook Applying some simple math, one can calculate an EPS figure.

I have included a screen shot of my model. In addition, a week before announcing earnings, CHK releases its production results Production Announcement. Therefore, the EPS forecast model could be refined by entering the actual production figures. Selling price and costs are still unknown, but the figures from CHK’s outlook have always been practically spot-on.

With the all the needed information available, how do the analysts continue miss by so much? I have no clue. We know that they are highly intelligent people with considerable resources. I surmise that since they cover so many companies, sometimes it’s not feasible to keep up-to-date on every single stock in their coverage universe.