Southwestern Energy: Earnings Have Lower Production, But Pending Merger Offers Upside
Summary
- Southwestern Energy Company reported disappointing second-quarter earnings, missing revenue and profit expectations, leading to a 6.20% stock decline.
- Despite struggles in the natural gas industry, Southwestern Energy's net loss was due to a non-cash impairment charge with positive cash flow.
- The delayed merger with Chesapeake Energy presents a potential short-term profit opportunity for investors if and when it closes.
- The company's weighted average realized prices were actually up year-over-year, suggesting that it was entirely lower production that caused a revenue decline.
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Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.
He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
I am long various energy-focused funds that may hold long positions in any stock mentioned in this article. I exercise no control over these funds and their holdings may change at any time without my knowledge.
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