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Southwestern Energy Beats 1Q18 Earnings Estimate by $0.03

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Southwestern Energy beats 1Q18 adjusted EPS

Southwestern Energy (SWN) announced its 1Q18 earnings on April 26 after the market closed, beating adjusted EPS (earnings per share) estimates by $0.03. It recorded an adjusted profit of $0.28 per share, whereas the Wall Street analyst consensus was $0.25. On a year-over-year basis, adjusted EPS was $0.10 higher than 1Q17 at $0.18. Sequentially, it was $0.12 higher than 4Q17.

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A revenue beat

In 1Q18, Southwestern Energy reported revenues of $920 million, which came in well above analysts’ consensus of $847 million. On the year-over-year basis, revenues were 9% higher than 1Q17 at $846 million. Even sequentially, revenues were 14% higher than 4Q17 revenues of $809 million.

The year-over-year increase of 11% in 1Q18 production and higher realized prices (excluding derivatives) for natural gas liquids and crude oil made a positive impact. Its price for natural gas liquids, excluding derivatives, increased 16% to $15.43 per barrel in 1Q18, from $13.28 per barrel in 1Q17. The significant 37% increase coupled with higher realizations impacted revenues positively.

Reported earnings

Southwestern Energy’ adjusted EPS excludes the one-time benefits and charges totaling $0.08 per share. Most of that was due to tax-related adjustments. Adding back these one-time items, its EPS on a GAAP (generally accepted accounting principles) basis was $0.36 in 1Q18. Its reported EPS was $0.57 in 1Q17.

Lower reported EPS in 1Q18 compared to 1Q17 could be due to a higher increase in operating costs and expenses when compared with revenues. Even though SWN’s revenues saw a year-over-year increase of 9% in 1Q18, its operating costs and expenses increased even more by 15%, which acted negatively on its bottom line.

In reaction to its 1Q18 earnings, SWN stock was trading 2% higher in after-hours trading. To read more on upstream stocks this earnings season, be sure to check out Market Realist’s Energy and Power page.

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