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Southwestern Energy (SWN) Q1 Earnings Beat, Revenues Up Y/Y

Zacks Equity Research

Southwestern Energy Company’s SWN first-quarter 2019 adjusted earnings of 27 cents per share surpassed the Zacks Consensus Estimate of 23 cents. However, the bottom line  decreased from 28 cents per share registered in the year-ago period.

Southwestern Energy Company Price, Consensus and EPS Surprise

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

Quarterly operating revenues totaled $990 million, which outpaced the Zacks Consensus Estimate of $618 million and also increased from $920 million in the first quarter of 2018.  

Higher realized natural gas prices and lower expenses, which was partially offset by lower realized liquids prices, aided the quarterly results.

Production and Realized Prices

During the first quarter, the company’s total production decreased 19.5% year over year to 182 billion cubic feet equivalent (Bcfe).

The company’s average realized gas price for the quarter, including hedges, rose to $2.92 per thousand cubic feet (Mcf) from $2.77 per Mcf in the year-ago period. Oil was sold at $47.82 per barrel compared with the year-earlier level of $56.01. Natural gas liquids were sold at $15.05 per barrel than $15.43 in the year-ago period.  

Segmental Highlights

In the quarter under review, operating income from the Exploration and Production (E&P) segment was $210 million compared with $238 million in the last-year comparable quarter.

On a per-Mcfe basis, lease operating expenses were 90 cents compared with the prior-year quarter level of 94 cents. General and administrative expenses per unit of production were 19 centscompared with 21 cents in the prior-year quarter.

Operating income at the company’s Midstream Services segment totaled $3 million in the first quarter compared with $17 million in the year-ago quarter.

Capex and Debt

Southwestern Energy’s total capital expenditure during the first quarter was approximately $325 million. As of Mar 31, 2019, the company’s long-term debt was $2.3 billion, which represents a debt-to-capitalization ratio of 43.6%.

Zacks Rank & Key Picks

Southwestern Energy currently carries a Zacks Rank #3 (Hold).Some better-ranked players in the energy space are CrossAmerica Partners L.P. CAPL, SEACOR Holdings, Inc CKH and Cabot Oil & Gas Corporation COG. While CrossAmerica Partners and SEACOR Holdings sport a Zacks Rank #1 (Strong Buy), Cabot Oil & Gas has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CrossAmerica Partners is involved in the wholesale distribution of motor fuels, comprising gasoline and diesel fuel. The partnership delivered an average positive earnings surprise of 452.2% in the last four quarters.

SEACOR Holdings is a diversified holding company, mainly focused on domestic and international transportation, logistics as well as risk management consultancy. For 2019, the bottom lineis expected to inch up 1.7% year over year. The company delivered an average positive earnings surprise of 16.5% in the trailing four quarters.

Headquartered in Houston, TX, Cabot Oil & Gas is an independent oil and gas exploration company with producing properties mainly in the continental U.S. The top and bottom line for 2019 is expected to inch up 8.1% and 65.6%, respectively, on a year-over-year basis.

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