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Southwestern Energy (SWN) Q3 Earnings: What to Expect?

Leading oil and gas drilling contractor Southwestern Energy CompanySWN is expected to report third-quarter 2015 earnings on Oct 22, after market closes.

In the last quarter, the company reported a loss of 2 cents per share. The Zacks Consensus Estimate was of earnings of 5 cents. The reported figure also plunged 103.4% from the year-ago earnings of 59 cents. Let's see how things are shaping up prior to the announcement.

Let's see how things are shaping up for this announcement.

What's Driving the Better-Than-Expected Earnings?

Southwestern Energy invested heavily in the development of the fertile Marcellus play, where it held leases for approximately 337,300 net acres. Subsequently, the company increased its acreage in the Marcellus Shale in Pennsylvania by acquiring stakes from other stakeholders. Southwestern Energy's gas production increased to 766 Bcf in 2014 from 656 Bcf in 2013. This will expose the company to a play with a low cost structure and additional acreage.

Southwestern Energy has a diversified reserve base in multiple U.S. basins and remains focused on investments in high-return areas such as the Fayetteville, Appalachia and New Ventures. Moreover, the company maintains a competitive cost structure, which could contribute to steady growth and returns throughout the business cycle.

Earnings Whispers

Our proven model shows that Southwestern Energy is likely to beat earnings because it has the right combination of two key ingredients.

Zacks ESP:Earnings ESP , which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +0.00%. This is a meaningful and a leading indicator of a likely positive earnings surprise.

Zacks Rank: Southwestern Energy carries a Zacks Rank #3 (Hold), which when combined with a 0.00% ESP, makes earnings prediction difficult.

Note that stocks with Zacks Ranks #1, 2 or 3 have a significantly higher chance of beating earnings. The Sell-rated stocks (Zacks Ranks #4 and 5) should never be considered going into an earnings announcement.

Stocks to Consider

Some stocks from the energy sector that have both a positive Earnings ESP and a favorable Zacks Rank are:

Natural Gas Services Group Inc NGS has an Earnings ESP of +21.05% and a Zacks Rank #1 (Strong Buy).

Sprague Resources LP SRLP has an Earnings ESP of +1.12% and a Zacks Rank #1.

Spectra Energy Partners, LP SEP has an Earnings ESP of +9.33% and a Zacks Rank #2 (Buy).

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SOUTHWESTRN ENE (SWN): Free Stock Analysis Report

SPECTRA EGY PTR (SEP): Free Stock Analysis Report

NATURAL GAS SVC (NGS): Free Stock Analysis Report

SPRAGUE RESRCS (SRLP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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