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Southwestern (SWN) Q2 Earnings Beat Estimates, Revenues Miss

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Southwestern Energy Company SWN reported break-even earnings for second-quarter 2020, comparing favorably with the Zacks Consensus Estimate of a loss of 3 cents. In the year-ago quarter, the company reported earnings of 8 cents per share.

Quarterly operating revenues of $410 million missed the Zacks Consensus Estimate of $565 million and declined from $667 million in second-quarter 2019.

Southwestern Energy Company Price, Consensus and EPS Surprise

 

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

Southwestern Energy Company price-consensus-eps-surprise-chart | Southwestern Energy Company Quote

The earnings beat was supported by higher gas equivalent production, partially offset by lower average realized commodity prices.

Higher Total Production

The company’s total second-quarter production increased to 201 billion cubic feet equivalent (Bcfe) from 186 Bcfe a year ago. Gas production in the quarter was 158 Bcf compared with the year-ago level of 148 Bcf.

Moreover, oil production surged to 1,083 thousand barrels (MBbls) from 937 MBbls in the year-ago quarter. Natural gas liquids production in the quarter under review was recorded at 6,111 MBbls, higher than the year-ago level of 5,497 MBbls. It is to be noted that almost 78.6% of its volume mix constituted of natural gas.

Lower Average Realized Prices

The company’s average realized gas price in the quarter, excluding derivatives, fell to 98 cents per thousand cubic feet (Mcf) from $1.80 a year ago. Oil was sold at $15.69 per barrel compared with the year-earlier level of $49.55. Natural gas liquids were sold at $6.43 per barrel, lower than $10.51 in the year-ago period.

Expenses

On a per-Mcfe basis, lease operating expenses were 91 cents compared with the prior-year level of 90 cents. However, general and administrative expenses per unit of production were 14 cents, down from 19 cents in the year-ago quarter.

Financials

Southwestern’s total capital investment during the second quarter was $115 million. As of Jun 30, 2020, the company’s cash and cash equivalents were $10 million. Long-term debt was $2,440 million, which represents a debt-to-capitalization ratio of 0.75.

Guidance

The upstream energy player expects production volumes in 2020 in the range of 843 to 861 Bcfe. For 2020, the company has set a capital budget of $860 to $915 million.

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Concho Resources Inc. CXO, Noble Energy Inc. NBL and EOG Resources, Inc. EOG, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Concho is likely to see earnings growth of 21.6% in 2020.

Noble Energy has witnessed upward estimate revisions for its 2020 bottom line in the past 30 days. 

EOG Resources’ 2020 bottom-line estimates have risen more than 200% over the past 30 days.

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Noble Energy Inc. (NBL) : Free Stock Analysis Report
 
Southwestern Energy Company (SWN) : Free Stock Analysis Report
 
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
Concho Resources Inc. (CXO) : Free Stock Analysis Report
 
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