What: July was one of those months where anything that could go wrong for Southwestern Energy Company (NYSE:SWN) did go wrong. I counted a trio of issues fueling the stock's 15.7% sell-off for the month.
So what: July was a dour month for energy stocks in general as crude oil rolled over and plunged 20%, taking the sector down with it. While Southwestern Energy is somewhat immune from oil as it's mainly a natural gas producer, oil's plunge does impact NLGs, which has an impact on the company. Further, the price of natural gas remained weak during the month, which certainly didn't help matters either.
Also not helping matters last month were analysts. While they were largely silent on Southwestern, Credit Suisse still didn't do them any favors. While the firm upgraded the entire E&P sector to overweight and upgraded several energy stocks, the firm left its underperform rating on Southwestern.
To round out the trio of downers for Southwestern Energy, it reported disappointing second-quarter results. In fact, the company unexpectedly lost money, reporting at $0.02 per share loss, while analysts were expecting a $0.06 per share gain. That said, the company did raise its production guidance while simultaneously lowering its capex budget as its getting better well results while spending less money. As a result, the company is now guiding to grow production 27% year-over-year.
Now what: Southwestern Energy can't control commodity prices, nor what analysts think of the company. However, it is controlling what it can, which is to improve its returns by generating more production from fewer capex dollars. That improvement is putting the company in a solid position to withstand challenging market conditions.