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Southwestern Energy (SWN) Down 13.8% Since Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Southwestern Energy Company (SWN - Free Report) . Shares have lost about 13.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Southwestern Energy Q1 Earnings and Revenues Beat
Southwestern Energy Company’s first-quarter 2017 results improved due to higher realized natural gas and liquids prices as well as lower operating expenses.
The company reported first-quarter adjusted earnings of $0.18 per share beat the Zacks Consensus Estimate of $0.17. Last year, the company had incurred a loss of $0.08 per share.
Quarterly operating revenues of $846 million surpassed the Zacks Consensus Estimate of $738.6 million and also increased substantially from $579 million in the first quarter of 2016.
Production and Realized Prices
During the first quarter, the company’s total production declined 14% year over year to 204 billion cubic feet equivalent (Bcfe).
The company’s average realized gas price for the quarter, including hedges, rose to $2.57 per thousand cubic feet (Mcf) from $1.48 per Mcf in the year-ago period. Oil was sold at $43.74 per barrel compared with the year-earlier level of $18.65. Natural gas liquids were sold at $13.28 per barrel as against $4.98 in the year-ago period.
Segmental Highlights
Operating income from the Exploration and Production (E&P) segment was $225 million for the first quarter. The company reported operating loss of $1.2 billion in the last-year comparable quarter. The increase was primarily driven by higher realized natural gas and liquids prices as well as lower operating costs. This was partially offset by reduced production volumes.
On a per-Mcfe basis, lease operating expenses were $0.89 compared with the prior-year quarter level of $0.88. General and administrative expenses per unit of production also increased to $0.21 from $0.19 in the prior-year quarter.
Operating income for the company’s Midstream Services segment was $41 million in the first quarter compared with $63 million in the year-ago quarter. The decline in operating income largely stemmed from a decrease in volumes gathered due to lower production volumes in the Fayetteville Shale.
Capex and Debt
The company’s total capital expenditure during the first quarter was approximately $290 million. As of Mar 31, 2017, the company’s long-term debt was $4.4 billion, which represents a debt-to-capitalization ratio of 77.3%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three revisions higher for the current quarter compared to four lower.
At this time, Southwestern Energy's stock has a great Growth Score of 'A', while it is lagging a bit on the momentum front with 'B'. Following a similar course, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value and growth investors than momentum investors.
Outlook
While estimates have been trending downward for the stock, the magnitude of these revisions looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Southwestern Energy (SWN) Down 13.8% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Southwestern Energy Company (SWN - Free Report) . Shares have lost about 13.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Southwestern Energy Q1 Earnings and Revenues Beat
Southwestern Energy Company’s first-quarter 2017 results improved due to higher realized natural gas and liquids prices as well as lower operating expenses.
The company reported first-quarter adjusted earnings of $0.18 per share beat the Zacks Consensus Estimate of $0.17. Last year, the company had incurred a loss of $0.08 per share.
Quarterly operating revenues of $846 million surpassed the Zacks Consensus Estimate of $738.6 million and also increased substantially from $579 million in the first quarter of 2016.
Production and Realized Prices
During the first quarter, the company’s total production declined 14% year over year to 204 billion cubic feet equivalent (Bcfe).
The company’s average realized gas price for the quarter, including hedges, rose to $2.57 per thousand cubic feet (Mcf) from $1.48 per Mcf in the year-ago period. Oil was sold at $43.74 per barrel compared with the year-earlier level of $18.65. Natural gas liquids were sold at $13.28 per barrel as against $4.98 in the year-ago period.
Segmental Highlights
Operating income from the Exploration and Production (E&P) segment was $225 million for the first quarter. The company reported operating loss of $1.2 billion in the last-year comparable quarter. The increase was primarily driven by higher realized natural gas and liquids prices as well as lower operating costs. This was partially offset by reduced production volumes.
On a per-Mcfe basis, lease operating expenses were $0.89 compared with the prior-year quarter level of $0.88. General and administrative expenses per unit of production also increased to $0.21 from $0.19 in the prior-year quarter.
Operating income for the company’s Midstream Services segment was $41 million in the first quarter compared with $63 million in the year-ago quarter. The decline in operating income largely stemmed from a decrease in volumes gathered due to lower production volumes in the Fayetteville Shale.
Capex and Debt
The company’s total capital expenditure during the first quarter was approximately $290 million. As of Mar 31, 2017, the company’s long-term debt was $4.4 billion, which represents a debt-to-capitalization ratio of 77.3%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three revisions higher for the current quarter compared to four lower.
Southwestern Energy Company Price and Consensus
Southwestern Energy Company Price and Consensus | Southwestern Energy Company Quote
VGM Scores
At this time, Southwestern Energy's stock has a great Growth Score of 'A', while it is lagging a bit on the momentum front with 'B'. Following a similar course, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for value and growth investors than momentum investors.
Outlook
While estimates have been trending downward for the stock, the magnitude of these revisions looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.