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Southwestern Energy (SWN) Slides 1.8% Despite Q3 Earnings Beat

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Southwestern Energy Company (SWN - Free Report) declined 1.8% despite reporting strong results for the third quarter of 2021. This reflects that investors are still concerned with coronavirus-induced energy market uncertainty.

The upstream energy firm reported third-quarter earnings of 24 cents per share, beating the Zacks Consensus Estimate by a penny. The bottom line improved from the year-ago quarter’s earnings per share of 8 cents.

Quarterly operating revenues of $1,598 million outpaced the Zacks Consensus Estimate of $1,015 million and the year-ago figure of $527 million.

The strong quarterly results were owing to higher gas equivalent production and commodity prices.

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

Total Production

The company’s total third-quarter production increased to 310 billion cubic feet equivalent (Bcfe) from 221 Bcfe a year ago. Gas production in the reported quarter was 251 Bcf compared with the year-ago level of 173 Bcf.

Natural gas liquids’ production in the quarter under review was 8,011 thousand barrels (MBbls), higher than the year-ago level of 6,687 MBbls. Oil production increased to 1,729 MBbls from 1,294 MBbls in the year-ago quarter. Almost 81% of its volume mix constituted natural gas.

Average Realized Prices

The company’s average realized gas price in the reported quarter, excluding derivatives, increased to $3.18 per thousand cubic feet (Mcf) from $1.09 a year ago. Oil was sold at $62.32 per barrel compared with the year-earlier level of $29.46. Natural gas liquids were sold at $31.76 per barrel, significantly higher than $10.34 in the year-ago period.

Expenses

On a per-Mcfe basis, lease operating expenses were 95 cents compared with the prior-year level of 91 cents. General and administrative expenses per unit of production were 9 cents versus 12 cents in the year-ago quarter.

Financials

Southwestern’s total capital investment in the third quarter was $291 million.

As of Sep 30, 2021, the company’s cash and cash equivalents were $12 million. Long-term debt was $4,036 million.

Acquisition Deal

In a separate release the company announced a definitive agreement to acquire GEP Haynesville, LLC – the third-largest private producer in the prolific Haynesville sale play. The deal is valued at $1.85 billion.

Zacks Rank & Stocks to Consider

The company carries a Zacks Rank #3 (Hold). A few better-ranked stocks from the energy space include Whiting Petroleum Corporation (WLL - Free Report) , Comstock Resources, Inc. (CRK - Free Report) and APA Corporation (APA - Free Report) . While Comstock carries a Zacks Rank #2 (Buy), while Whiting Petroleum and APA Corporation sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Whiting Petroleum has witnessed upward earnings estimate revisions for 2021 in the past 30 days.

Comstock is expected to witness earnings growth of 378.3% in 2021.

APA Corporation has seen upward earnings estimate revisions for 2021 in the past 30 days.