Since the first-quarter results were announced on Apr 30, Southwestern Energy Company (SWN - Free Report) has seen a 3% rally in share price. The upstream energy firm’s better-than-expected quarterly earnings and favorable second-quarter production guidance despite the coronavirus pandemic lent support to the stock.
Q1 Earnings Beat
Southwestern Energy reported first-quarter 2020 adjusted earnings of 10 cents per share, beating the Zacks Consensus Estimate of 7 cents. However, the bottom line declined from the year-ago profit of 27 cents.
Quarterly operating revenues of $592 million missed the Zacks Consensus Estimate of $641 million and declined from $990 million in first-quarter 2019.
The earnings beat was supported by higher gas equivalent production, partially offset by lower average realized commodity prices.
Total Production Increases
The company’s total first-quarter production increased to 201 billion cubic feet equivalent (Bcfe) from 182 Bcfe a year ago. Gas production in the quarter was 156 Bcf compared with the year-ago level of 143 Bcf.
Moreover, oil production surged to 1,399 thousand barrels (MBbls) from 854 MBbls in the year-ago quarter. Natural gas liquids production in the quarter under review was recorded at 6,128 MBbls, higher than the year-ago level of 5,603 MBbls. It is to be noted that almost 77.6% of its volume mix constituted of natural gas.
Average Realized Prices Fall
The company’s average realized gas price in the quarter, excluding derivatives, fell to $1.53 per thousand cubic feet (Mcf) from $2.95 a year ago. Oil was sold at $36.72 per barrel compared with the year-earlier level of $45.48. Natural gas liquids were sold at $8.16 per barrel, lower than $14.45 in the year-ago period.
On a per-Mcfe basis, lease operating expenses were 96 cents compared with the prior-year level of 90 cents. However, general and administrative expenses per unit of production were 11 cents, down from 19 cents in the year-ago quarter.
Southwestern Energy’s total capital expenditure during the first quarter was $86 million.
As of Mar 31, 2020, the company’s cash and cash equivalents were $5 million. Long-term debt was $2,279 million, which represents a debt-to-capitalization of 58.8%.
The upstream energy player expects production volumes in the June quarter of 2020 to be mostly unaffected, thanks to improvement in well performance.
Zacks Rank & Other Stocks to Consider
Southwestern Energycurrently carries a Zacks Rank #2 (Buy). Other prospective stocks in the energy sector are Murphy USA Inc (MUSA - Free Report) , Key Energy Services, Inc. (KEGX - Free Report) and CNX Resources Corporation (CNX - Free Report) . While Key Energy sports a Zacks Rank #1 (Strong Buy), Murphy USA and CNX Resources carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Murphy USA is likely to see earnings growth of 7% in the next five years.
Key Energy is likely to see bottom-line growth of 97.2% in 2020.
CNX Resources has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.
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