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Southwestern Energy (SWN) Beats on Q1 Earnings & Revenues

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Southwestern Energy Company posted first-quarter 2018 adjusted earnings of 28 cents per share, which beat the Zacks Consensus Estimate of 26 cents and improved from 18 cents in the year-ago quarter.
 

Southwestern Energy Company Price, Consensus and EPS Surprise

 

Southwestern Energy Company Price, Consensus and EPS Surprise | Southwestern Energy Company Quote

 

Quarterly operating revenues of $920 million surpassed the Zacks Consensus Estimate of $864 million and rose from $846 million in the first quarter of 2017.  

The growth was aided by higher realized natural gas and liquids prices as well as increased production.

Production and Realized Prices

During the first quarter, the company’s total production increased 10.8% year over year to 226 billion cubic feet equivalent (Bcfe).

The company’s average realized gas price, including hedges, rose to $2.67 per thousand cubic feet (Mcf) from $2.57 per Mcf in the year-ago quarter. Oil was sold at $56.01 per barrel compared with the year-earlier quarter’s level of $43.74. Natural gas liquids were sold at $15.43 per barrel, up from $13.28 in the prior-year quarter.  

Segmental Highlights

Operating income in the Exploration and Production (E&P) segment was $238 million for the first quarter compared with $225 million in the prior-year quarter. The increase was primarily driven by higher realized natural gas and liquids prices as well as higher production volumes. This was partially offset by higher operating costs.

On a per-Mcfe basis, lease operating expenses were 94 cents compared with the prior-year quarter’s level of 89 cents. General and administrative expenses per unit of production were unchanged at 21 cents from the prior-year quarter.

Operating income for the company’s Midstream Services segment was $17 million in the first quarter compared with $41 million in the year-ago quarter. The decline in operating income stemmed from a fall in volumes gathered due to lower production in the Fayetteville Shale.
 
Capex and Debt

The company’s total capital expenditure during the first quarter was approximately $338 million. As of Mar 31, 2018, the company’s long-term debt was $4.4 billion, which represents a debt-to-capitalization ratio of 66.7%.

Q1 Price Performance

During the January-to-March quarter, Southwestern’s shares declined 22.4% compared with the industry’s 4.4% fall.



 

Zacks Rank & Key Picks

Southwestern currently carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Nine Energy Service, Inc (NINE - Free Report) , BaytexEnergy Corp (BTE - Free Report) and EOG Resources Inc (EOG - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nine Energy Serviceis engaged in delivering onshore completion and production services to unconventional oil and gas resource development. The company posted a positive earnings surprise of 6.25% in the preceding quarter.

Baytex Energy is a conventional oil and gas income trust focused on maintaining its production and asset base through internal property development and delivering consistent returns to its unitholders. It pulled off an average positive earnings surprise of 77.3% over the last three quarters.

Houston, TX-based EOG Resources is a major independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 40.94% over the preceding four quarters.

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