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Can Southwestern Energy (SWN) Deliver a Beat in Q3 Earnings?
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Independent energy firm, Southwestern Energy Company (SWN - Free Report) , is set to report third-quarter 2017 results on Oct 26, after the closing bell.
Last quarter, the company delivered earnings of 8 cents per share that lagged the Zacks Consensus Estimate of 16 cents. Notably, the company incurred a loss of 9 cents in the year-ago quarter. Let’s see how things are shaping up for this announcement.
Southwestern Energy Company Price and EPS Surprise
Let’s look at the estimate revisions in order to get a clear picture of what analysts are thinking about the company before earnings release.
The Zacks Consensus Estimate of 8 cents for the third quarter has seen one upward revision and one downward revision by firms in the last seven days. It reflects year-over-year growth of about 172.2%.
Further, analysts polled by Zacks expect revenues of $755.9 million for the impending quarter, up 16.11% from the year-ago quarter.
Factors to Consider this Quarter
Southwestern Energy has a diversified reserve base in multiple U.S. basins and remains focused on investments in high-return areas such as Fayetteville, Appalachia and other new ventures. Moreover, the company maintains a competitive cost structure, which contributes to steady growth and returns throughout the business cycle. These benefits are expected to be reflected in the third-quarter results.
Southwestern Energy invested heavily in the development of the fertile Marcellus play, where it held leases for approximately 337,300 net acres. Subsequently, the company increased its acreage in the Marcellus Shale in Pennsylvania by acquiring stakes from other stakeholders. We can expect significant output from those prolific plays in the coming days to increase the company’s profit, a part of which is expected to be reflected in this quarter as well.
Despite these positives, Southwestern Energy’s shares have underperformed the industry in the last three months. During the aforesaid period, shares of the company have returned 0.5% compared with the industry's growth of 5.1%.
Southwestern Energy’s high-debt level raises concerns. It had a debt equity ratio of 276%, while the broader industry average was 95.1%. The company’s high leverage is a cause of concern.
Analysts polled by Zacks expect average gas price to fall over 9% from the preceding quarter to $2.13 per million cubic feet. The decline in the gas prices will adversely impact energy players like Southwestern Energy.
Earnings Whispers
Our proven model shows that Southwestern Energy is likely to beat on earnings this time because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +4.76%. This is because the Most Accurate estimate is pegged at 9 cents, while the Zacks Consensus Estimate is at 8 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Southwestern Energy carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating on earnings. The combination of Range Resources’ favorable Zacks Rank and Earnings ESP makes us confident about an earnings beat.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Other Stocks to Consider
Here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.
Noble Midstream Partners LP , headquartered in Houston, TX, has diversified energy infrastructure properties.The company has an Earnings ESP of +1.91% and boasts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesoro Corporation , based in San Antonio, TX, operates as the refiner and marketer of petroleum products. The company has an Earnings ESP of +5.02% and carries a Zacks Rank #3.
Gulfport Energy Corporation (GPOR - Free Report) , headquartered in Oklahoma City, OK, owns and operates mature oil and gas properties in the Louisiana Gulf Coast area. The acompany has an Earnings ESP of +0.97% and carries a Zacks Rank #3.
"Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Can Southwestern Energy (SWN) Deliver a Beat in Q3 Earnings?
Independent energy firm, Southwestern Energy Company (SWN - Free Report) , is set to report third-quarter 2017 results on Oct 26, after the closing bell.
Last quarter, the company delivered earnings of 8 cents per share that lagged the Zacks Consensus Estimate of 16 cents. Notably, the company incurred a loss of 9 cents in the year-ago quarter. Let’s see how things are shaping up for this announcement.
Southwestern Energy Company Price and EPS Surprise
Southwestern Energy Company Price and EPS Surprise | Southwestern Energy Company Quote
Which Way are Estimates Treading?
Let’s look at the estimate revisions in order to get a clear picture of what analysts are thinking about the company before earnings release.
The Zacks Consensus Estimate of 8 cents for the third quarter has seen one upward revision and one downward revision by firms in the last seven days. It reflects year-over-year growth of about 172.2%.
Further, analysts polled by Zacks expect revenues of $755.9 million for the impending quarter, up 16.11% from the year-ago quarter.
Factors to Consider this Quarter
Southwestern Energy has a diversified reserve base in multiple U.S. basins and remains focused on investments in high-return areas such as Fayetteville, Appalachia and other new ventures. Moreover, the company maintains a competitive cost structure, which contributes to steady growth and returns throughout the business cycle. These benefits are expected to be reflected in the third-quarter results.
Southwestern Energy invested heavily in the development of the fertile Marcellus play, where it held leases for approximately 337,300 net acres. Subsequently, the company increased its acreage in the Marcellus Shale in Pennsylvania by acquiring stakes from other stakeholders. We can expect significant output from those prolific plays in the coming days to increase the company’s profit, a part of which is expected to be reflected in this quarter as well.
Despite these positives, Southwestern Energy’s shares have underperformed the industry in the last three months. During the aforesaid period, shares of the company have returned 0.5% compared with the industry's growth of 5.1%.
Southwestern Energy’s high-debt level raises concerns. It had a debt equity ratio of 276%, while the broader industry average was 95.1%. The company’s high leverage is a cause of concern.
Analysts polled by Zacks expect average gas price to fall over 9% from the preceding quarter to $2.13 per million cubic feet. The decline in the gas prices will adversely impact energy players like Southwestern Energy.
Earnings Whispers
Our proven model shows that Southwestern Energy is likely to beat on earnings this time because it has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +4.76%. This is because the Most Accurate estimate is pegged at 9 cents, while the Zacks Consensus Estimate is at 8 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Southwestern Energy carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating on earnings. The combination of Range Resources’ favorable Zacks Rank and Earnings ESP makes us confident about an earnings beat.
Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.
Other Stocks to Consider
Here are some firms that you may want to consider on the basis of our model. These have the right combination of elements to beat earnings this quarter.
Noble Midstream Partners LP , headquartered in Houston, TX, has diversified energy infrastructure properties.The company has an Earnings ESP of +1.91% and boasts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesoro Corporation , based in San Antonio, TX, operates as the refiner and marketer of petroleum products. The company has an Earnings ESP of +5.02% and carries a Zacks Rank #3.
Gulfport Energy Corporation (GPOR - Free Report) , headquartered in Oklahoma City, OK, owns and operates mature oil and gas properties in the Louisiana Gulf Coast area. The acompany has an Earnings ESP of +0.97% and carries a Zacks Rank #3.
"Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>