Southwestern Energy Falls Despite Earnings Beat

NEW YORK (TheStreet) -- Southwestern Energy  (SWN) fell 4.15% to $41.35, down $1.79 from its previous close of $43.14, at the close of the trading day on Friday despite the company's report of fourth-quarter earnings that beat analysts' expectations.

The company reported a profit of $144.5 million, or 41 cents a share, up from a loss of $355.6 million, or $1.02 a share, in the same period one year earlier. Adjusted profit increased to 54 cents from 45 cents, excluding tax items, derivatives and significant impairment charge from the period one year earlier tied to low natural gas prices. Operating revenue spiked 17% to $907.1 million.

This beat the consensus estimate of earnings per share of 53 cents on revenue of $865.5 million, according to analysts polled by Thomson Reuters.

The stock had a volume of 11,346,877, well above its average of 3,795,890. It hit a high of $41.69 and a low of $40.30 on Friday. The stock has a one-year high of $44.40 and a one-year low of $33.89.

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TheStreet Ratings team rates SOUTHWESTERN ENERGY CO as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate SOUTHWESTERN ENERGY CO (SWN) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, compelling growth in net income, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 25.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 443.9% when compared to the same quarter one year prior, rising from -$54.05 million to $185.87 million.
  • Net operating cash flow has increased to $499.97 million or 40.80% when compared to the same quarter last year. In addition, SOUTHWESTERN ENERGY CO has also vastly surpassed the industry average cash flow growth rate of -51.05%.
  • The gross profit margin for SOUTHWESTERN ENERGY CO is rather high; currently it is at 59.21%. Regardless of SWN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SWN's net profit margin of 21.40% significantly outperformed against the industry.
  • Powered by its strong earnings growth of 431.25% and other important driving factors, this stock has surged by 27.77% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: SWN Ratings Report

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