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Southwestern (SWN) Q1 Earnings Miss on Lower Production
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Southwestern Energy Company (SWN - Free Report) reported adjusted first-quarter 2024 earnings of 12 cents per share, which missed the Zacks Consensus Estimate by a penny. The bottom line also declined from the year-ago quarter’s 31 cents.
Quarterly operating revenues of $1.4 billion missed the Zacks Consensus Estimate of $1.5 billion and declined from the year-ago quarter’s $2.1 billion.
Weak quarterly results were driven by lower gas-equivalent production volumes and lower realized gas prices.
Southwestern Energy Company Price, Consensus and EPS Surprise
Southwestern’s total first-quarter production decreased to 376 billion cubic feet equivalent (Bcfe) from 411 Bcfe a year ago and missed our estimate of 405.6 Bcfe. Gas production declined from the year-ago level of 353 Bcf to 325 Bcf and missed our estimate of 343.5 Bcf.
Natural gas liquids production totaled 7,261 thousand barrels (MBbls), lower than the year-ago level of 8,240 MBbls. The metric missed our estimate of 8,922 MBbls.
Oil production declined to 1,231 MBbls from 1,418 MBbls in the year-earlier period and missed our estimate of 1,435.6 MBbls. Almost 86.4% of its volume mix constituted natural gas.
Average Realized Prices
Southwestern’s average realized gas price in the reported quarter, excluding derivatives, decreased to $1.76 per thousand cubic feet (Mcf) from $3.22 a year ago. Our estimate of $1.93 per Mcf for the metric also indicates a year-over-year decline.
Oil was sold at $66.07 per barrel compared with the year-earlier figure of $65.92. Natural gas liquids were sold at $23.88 per barrel, lower than $24.39 in the year-ago period.
Expenses
On a per-Mcfe basis, lease operating expenses amounted to $1.12 compared with the prior-year level of $1.05. The metric is in line with our estimate. General and administrative expenses per unit of production were 13 cents, up from the 10 cents reported in the year-ago quarter and surpassed our estimate of 12 cents.
Total operating costs and expenses were $3.5 billion, an increase from $1.5 billion in the March-end quarter of 2023 and the same beat our estimate of $2.7 billion. General and administrative expenses increased to $56 million from $46 million in the year-ago period. Marketing purchases decreased to $588 million from the prior-year quarter of $667 million.
Financials
Southwestern’s total capital investment in the first quarter was $538 million. As of Mar 31, 2024, the company’s cash and cash equivalents were $29 million. Long-term debt was $3.6 billion.
Guidance
SWN has discontinued providing guidance due to the pending merger with Chesapeake Energy Corporation.
In 2024, the company plans to align its operations and capital expenditure with projected annual cash flow. This strategy is anticipated to maintain a steady production profile throughout the year based on prevailing strip prices.
SM Energy Company (SM - Free Report) is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.33 and $6.96, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Hess Corporation (HES - Free Report) is a leading oil and natural gas exploration and production company. The company’s oil and gas proved reserves increased last year by more than 8% year over year.
The Zacks Consensus Estimate for HES’s 2024 and 2025 EPS is pegged at $8.33 and $10.49, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
Ecopetrol S.A. (EC - Free Report) operates across various sections of the oil and gas industry, including the exploration, development, and production of oil and gas, refining, transportation, and the sale of petroleum products.
Ecopetrol has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days. The Zacks Consensus Estimate for EC’s 2024 and 2025 EPS is pegged at $2.77 and $2.29, respectively.
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Southwestern (SWN) Q1 Earnings Miss on Lower Production
Southwestern Energy Company (SWN - Free Report) reported adjusted first-quarter 2024 earnings of 12 cents per share, which missed the Zacks Consensus Estimate by a penny. The bottom line also declined from the year-ago quarter’s 31 cents.
Quarterly operating revenues of $1.4 billion missed the Zacks Consensus Estimate of $1.5 billion and declined from the year-ago quarter’s $2.1 billion.
Weak quarterly results were driven by lower gas-equivalent production volumes and lower realized gas prices.
Southwestern Energy Company Price, Consensus and EPS Surprise
Southwestern Energy Company price-consensus-eps-surprise-chart | Southwestern Energy Company Quote
Total Production
Southwestern’s total first-quarter production decreased to 376 billion cubic feet equivalent (Bcfe) from 411 Bcfe a year ago and missed our estimate of 405.6 Bcfe. Gas production declined from the year-ago level of 353 Bcf to 325 Bcf and missed our estimate of 343.5 Bcf.
Natural gas liquids production totaled 7,261 thousand barrels (MBbls), lower than the year-ago level of 8,240 MBbls. The metric missed our estimate of 8,922 MBbls.
Oil production declined to 1,231 MBbls from 1,418 MBbls in the year-earlier period and missed our estimate of 1,435.6 MBbls. Almost 86.4% of its volume mix constituted natural gas.
Average Realized Prices
Southwestern’s average realized gas price in the reported quarter, excluding derivatives, decreased to $1.76 per thousand cubic feet (Mcf) from $3.22 a year ago. Our estimate of $1.93 per Mcf for the metric also indicates a year-over-year decline.
Oil was sold at $66.07 per barrel compared with the year-earlier figure of $65.92. Natural gas liquids were sold at $23.88 per barrel, lower than $24.39 in the year-ago period.
Expenses
On a per-Mcfe basis, lease operating expenses amounted to $1.12 compared with the prior-year level of $1.05. The metric is in line with our estimate. General and administrative expenses per unit of production were 13 cents, up from the 10 cents reported in the year-ago quarter and surpassed our estimate of 12 cents.
Total operating costs and expenses were $3.5 billion, an increase from $1.5 billion in the March-end quarter of 2023 and the same beat our estimate of $2.7 billion. General and administrative expenses increased to $56 million from $46 million in the year-ago period. Marketing purchases decreased to $588 million from the prior-year quarter of $667 million.
Financials
Southwestern’s total capital investment in the first quarter was $538 million. As of Mar 31, 2024, the company’s cash and cash equivalents were $29 million. Long-term debt was $3.6 billion.
Guidance
SWN has discontinued providing guidance due to the pending merger with Chesapeake Energy Corporation.
In 2024, the company plans to align its operations and capital expenditure with projected annual cash flow. This strategy is anticipated to maintain a steady production profile throughout the year based on prevailing strip prices.
Zacks Rank & Key Picks
Currently, SWN carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SM Energy Company (SM - Free Report) is an independent oil and gas company engaged in the exploration, exploitation, development, acquisition, and production of oil and gas in North America.
The Zacks Consensus Estimate for SM’s 2024 and 2025 EPS is pegged at $6.33 and $6.96, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Hess Corporation (HES - Free Report) is a leading oil and natural gas exploration and production company. The company’s oil and gas proved reserves increased last year by more than 8% year over year.
The Zacks Consensus Estimate for HES’s 2024 and 2025 EPS is pegged at $8.33 and $10.49, respectively. The stock has witnessed upward earnings estimate revisions for 2024 and 2025 in the past seven days.
Ecopetrol S.A. (EC - Free Report) operates across various sections of the oil and gas industry, including the exploration, development, and production of oil and gas, refining, transportation, and the sale of petroleum products.
Ecopetrol has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days. The Zacks Consensus Estimate for EC’s 2024 and 2025 EPS is pegged at $2.77 and $2.29, respectively.