4Q16 revenues estimates
For 4Q16, Wall Street analysts expect Southwestern Energy (SWN) to report ~6% lower revenues on a YoY (year-over-year) basis, as compared to 4Q15. Sequentially, Southwestern Energy’s 4Q16 revenues expectations are ~1% lower than its 3Q16 revenues.
Understanding SWN’s 3Q16 revenue performance?
In its most recent earnings release in October 2016, Southwestern Energy beat its 3Q16 revenue estimate of ~$628 million by ~4%. In 3Q16, SWN reported a much steeper YoY fall of ~13% in YoY revenue growth. SWN’s ~59% revenues in 3Q16 came from natural gas and liquids production sales, while the remaining ~41% revenues came from its midstream business.
Despite higher realized prices in 3Q16, a steep decline in production volumes decreased SWN’s revenues from natural gas (UNG) and liquids production sales by ~22% to ~$381 million in 3Q16, down from ~$491 million in 3Q15, which negatively impacted SWN’s overall revenues growth. In 3Q16, Southwestern Energy’s production volumes fell ~15% to 211 Bcfe (billion cubic feet equivalent) from 249 Bcfe in 3Q15.
Fiscal 2016 revenues estimates
For fiscal 2016, Wall Street analysts expect Southwestern Energy to report ~22% lower revenues at ~$2.4 billion, as compared to ~$3.1 billion in 2015.
Notably, SWN’s yearly revenues have been declining since 2015.
We’ll discuss SWN’s production guidance for 4Q16 and fiscal 2016 in the next part.