What Can We Expect from Southwestern Energy’s 1Q16 Earnings?

Could Southwestern Energy Beat Its 1Q16 Earnings Expectations?

Southwestern Energy’s 1Q16 earnings and revenues estimates

Southwestern Energy (SWN) is set to report its 1Q16 earnings on April 21, 2016, after the market closes. For 1Q16, Wall Street analysts expect Southwestern Energy to report an adjusted loss of $0.20 per share, which is $0.42 per share lower than the 1Q15 profit of $0.22 per share. Even when compared sequentially with 4Q15, SWN’s 1Q16 earnings expectations are lower by $0.18 per share.

For 1Q16, Wall Street analysts expect Southwestern Energy to report revenues of ~$538 million, which is ~42% lower than the 1Q15 revenues of ~$933 million. Even when compared sequentially with 4Q15, SWN’s 1Q16 revenues expectations are ~29% lower. The lower revenue expectations for 1Q16 are the direct result of lower production guidance and the steep decline in natural gas (UNG) (DGAZ) (UGAZ) prices.

Southwestern Energy’s earnings trend

As seen in the above chart, Southwestern Energy reported much lower earnings in 2015. This was due to lower realized natural gas prices. In 2Q15, SWN saw its adjusted earnings turn negative for the first time since 2008. In 4Q15, excluding one-time items, SWN reported a loss of $0.02 per share, which was $0.02 better than the consensus estimate for loss of $0.04 per share. Its revenues fell ~21% year-over-year to ~$756 million. Since 1Q13, SWN has beaten the earnings expectations ~75% of the time.

Due to the steep downward trend in energy prices, upstream companies such as Murphy Oil (MUR), Occidental Petroleum (OXY), Consol Energy (CNX), and Range Resources (RRC) have reported ~53%, ~34%, ~18%, and ~53% year-over-year falls in their 4Q15 revenues, respectively.

In this series

Now that we’ve analyzed Southwestern Energy’s 1Q16 earnings expectations, in the course of this series, we’ll also look at Southwestern Energy’s production guidance, what Wall Street analysts are saying about Southwestern Energy ahead of its earnings, and how Southwestern ’s stock price has reacted to past earnings releases.

Continue to Next Part

Browse this series on Market Realist:

• Part 2 - Southwestern Energy’s Production Guidance Strategies for 1Q16

• Part 3 - What Are Wall Street Analysts Saying about Southwestern Energy?

• Part 4 - A Look at SWN’s Price Ahead of Its 1Q16 Earnings Release