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 hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, weak operating cash flow and generally higher debt management risk.
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- The revenue growth came in higher than the industry average of 10.6%. Since the same quarter one year prior, revenues rose by 12.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 36.56% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- SOUTHWESTERN ENERGY CO has improved earnings per share by 16.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOUTHWESTERN ENERGY CO swung to a loss, reporting -$2.03 versus $1.82 in the prior year. This year, the market expects an improvement in earnings ($1.95 versus -$2.03).
- Net operating cash flow has decreased to $372.14 million or 16.31% when compared to the same quarter last year. Despite a decrease in cash flow of 16.31%, SOUTHWESTERN ENERGY CO is in line with the industry average cash flow growth rate of -25.50%.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, SOUTHWESTERN ENERGY CO's return on equity significantly trails that of both the industry average and the S&P 500.
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