Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Southwestern Energy Company (NYSE: SWN) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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- The gross profit margin for SOUTHWESTERN ENERGY CO is rather high; currently it is at 59.40%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -81.40% is in-line with the industry average.
- SWN, with its decline in revenue, underperformed when compared the industry average of 0.6%. Since the same quarter one year prior, revenues fell by 21.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- SOUTHWESTERN ENERGY CO has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, SOUTHWESTERN ENERGY CO increased its bottom line by earning $1.82 versus $1.73 in the prior year. For the next year, the market is expecting a contraction of 31.9% in earnings ($1.24 versus $1.82).
- Despite currently having a low debt-to-equity ratio of 0.48, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that SWN's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.52 is low and demonstrates weak liquidity.
- The share price of SOUTHWESTERN ENERGY CO has not done very well: it is down 15.74% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
--Written by a member of TheStreet Ratings Staff.