Time New York: Wed 11 Dec 04:14 am  |  Save 15% on H&R Block Online


Southwestern (SWN) Q2 Earnings Miss on Lower Gas Production


Southwestern Energy Company SWN reported second-quarter 2019 adjusted earnings of 8 cents per share, missing the Zacks Consensus Estimate by a penny and declining from the year-ago profit of 18 cent.

Quarterly operating revenues of $667 million failed to beat the Zacks Consensus Estimate of $734 million and also declined from $816 million in the second quarter of 2018.

The weak quarterly results were because of lower gas equivalent production and a decline in the price of the commodity.

Production and Realized Prices

During the second quarter, the company’s total production fell 20.5% year over year to 186 billion cubic feet equivalent (Bcfe).

The company’s average realized gas price for the quarter, including hedges, fell to $1.94 per thousand cubic feet (Mcf) from $2.11 per Mcf a year ago. Oil was sold at $51.60 per barrel compared with the year-earlier level of $59.22. Natural gas liquids were sold at $12.62 per barrel, lower than $15.05 in the year-ago period.

Segmental Highlights

In the quarter under review, operating income from the Exploration and Production (E&P) segment was $30 million, down from $97 million in the last-year quarter.

On a per-Mcfe basis, lease operating expenses were 90 cents compared with the prior-year quarter level of 91 cents. General and administrative expenses per unit of production were 19 cents, flat year over year.

Operating loss at the company’s Midstream Services segment totaled $8 million in the second quarter against a profit of $27 million in the year-ago quarter.

Capex and Debt

Southwestern’s total capital expenditure during the second quarter was approximately $368 million. As of Jun 30, 2019, the company’s long-term debt was $2.3 billion, which represents a debt-to-capitalization ratio of 42.9%.


The upstream energy player announced that it has boosted its capital efficiencies owing to which it will not be spending more than $1.15 billion of capital in 2019. The limit that has been set by the company is below the high end of its prior projection.

Zacks Rank & Stocks to Consider

Southwestern currently carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include World Fuel Services Corporation INT, Delek Logistics Partners, L.P. DKL and TC PipeLines, LP TCP. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

World Fuel beat the Zacks Consensus Estimate in each of the prior four quarters, the average positive earnings surprise being 16.4%.

Delek Logistics is likely to see earnings growth of 4.9% through 2019.

TC PipeLines has an average positive earnings surprise of 12.6% for the past four quarters.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.
<-- You can share this post with your network,
or give us your opinion and leave a comment.
Be sure to check our RSS feeds for updates.