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Why Is Southwestern Energy (SWN) Up 16.7% Since Its Last Earnings Report?
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A month has gone by since the last earnings report for Southwestern Energy Company (SWN - Free Report) . Shares have added about 16.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is SWN due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2017 Results
Southwestern Energy Company delivered fourth-quarter 2017 adjusted earnings of 12 cents per share, which beat the Zacks Consensus Estimate of 10 cents. The bottom line also improved from 8 cents in the year-ago quarter.
Quarterly operating revenues of $809 million surpassed the Zacks Consensus Estimate of $798 million and also the year-ago figure of $684 million.
The surge in production and increase in commodity price realizations primarily contributed to the strong fourth-quarter results. Following the outperformances, the stock gained nearly 4% yesterday.
Production and Realized Prices
During the fourth quarter, the company’s total production increased 18.3% year over year to 239 billion cubic feet equivalent (Bcfe). Northeast Appalachia contributed the most to its total production.
The company’s average realized gas price in the quarter, including hedges, rose to $2.12 per thousand cubic feet (Mcf) from $2.07 per Mcf in the year-ago quarter. Oil was sold at $48.05 per barrel, increasing from the year-earlier level of $41.18. Natural gas liquids were sold at $17.98 a barrel, up from $12.08 in the prior-year quarter.
Segmental Highlights
Adjusted operating income from the Exploration and Production (E&P) business unit increased from $82 million in the year-ago quarter to $114 million. The rise in gas equivalent output and the surge in commodity prices aided the outperformance.
On a per-Mcfe basis, lease operating expenses were 91 cents, increased from 87 cents in the prior-year quarter. However, general and administrative expenses per unit of production were 22 cents, lower than 27 cents in the prior-year quarter.
Operating income for the Midstream Services unit also jumped from $40 million in the year-ago quarter to $54 million, owing to the higher margin from marketing operations.
Capex and Debt
The company’s total capital expenditure through 2017 was approximately $1.3 billion. As of Dec 31, the company’s long-term debt was $4.4 billion, which represents a debt-to-capitalization ratio of 44.2%.
Reserves Grow
The company’s total proved reserves, as of Dec 31, was recorded at 14,775 Bcfe, significantly higher than 5,253 Bcfe in the year-earlier period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to two lower.
At this time, SWN has a subpar Growth Score of D, a grade with the same score on the momentum front. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, SWN has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Southwestern Energy (SWN) Up 16.7% Since Its Last Earnings Report?
A month has gone by since the last earnings report for Southwestern Energy Company (SWN - Free Report) . Shares have added about 16.7% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is SWN due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2017 Results
Southwestern Energy Company delivered fourth-quarter 2017 adjusted earnings of 12 cents per share, which beat the Zacks Consensus Estimate of 10 cents. The bottom line also improved from 8 cents in the year-ago quarter.
Quarterly operating revenues of $809 million surpassed the Zacks Consensus Estimate of $798 million and also the year-ago figure of $684 million.
The surge in production and increase in commodity price realizations primarily contributed to the strong fourth-quarter results. Following the outperformances, the stock gained nearly 4% yesterday.
Production and Realized Prices
During the fourth quarter, the company’s total production increased 18.3% year over year to 239 billion cubic feet equivalent (Bcfe). Northeast Appalachia contributed the most to its total production.
The company’s average realized gas price in the quarter, including hedges, rose to $2.12 per thousand cubic feet (Mcf) from $2.07 per Mcf in the year-ago quarter. Oil was sold at $48.05 per barrel, increasing from the year-earlier level of $41.18. Natural gas liquids were sold at $17.98 a barrel, up from $12.08 in the prior-year quarter.
Segmental Highlights
Adjusted operating income from the Exploration and Production (E&P) business unit increased from $82 million in the year-ago quarter to $114 million. The rise in gas equivalent output and the surge in commodity prices aided the outperformance.
On a per-Mcfe basis, lease operating expenses were 91 cents, increased from 87 cents in the prior-year quarter. However, general and administrative expenses per unit of production were 22 cents, lower than 27 cents in the prior-year quarter.
Operating income for the Midstream Services unit also jumped from $40 million in the year-ago quarter to $54 million, owing to the higher margin from marketing operations.
Capex and Debt
The company’s total capital expenditure through 2017 was approximately $1.3 billion. As of Dec 31, the company’s long-term debt was $4.4 billion, which represents a debt-to-capitalization ratio of 44.2%.
Reserves Grow
The company’s total proved reserves, as of Dec 31, was recorded at 14,775 Bcfe, significantly higher than 5,253 Bcfe in the year-earlier period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter compared to two lower.
Southwestern Energy Company Price and Consensus
Southwestern Energy Company Price and Consensus | Southwestern Energy Company Quote
VGM Scores
At this time, SWN has a subpar Growth Score of D, a grade with the same score on the momentum front. However, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for value based on our styles scores.
Outlook
Estimates have been broadly trending upward for the stock and the magnitude of these revisions looks promising. Notably, SWN has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.