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What's in the Cards for Devon Energy's (DVN) Q3 Earnings?

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Devon Energy Corporation (DVN - Free Report) is set to report third-quarter earnings on Oct 29, after market close. This oil and gas company delivered an earnings surprise of 63.4% in the last four quarters.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly results.

Factors at Play

Devon Energy’s initiatives to lower cost by reducing production, and cutting general and administrative expenses are likely to get reflected in third-quarter results. The company has also been working to improve efficiency across its portfolio. These initiatives are likely to boost margins of the company in the third quarter.

During the quarter, it entered into an agreement to combine in an all-stock merger with WPX Energy. This decision is going to strengthen its operations in the prolific Permian Basin.

Expectation

Devon expects third-quarter oil production in the range of 138,000-143,000 barrels of oil per day (Boe/d), taking into consideration lower activity in Power River Basin and Delaware Basin. The Zacks Consensus Estimate for third-quarter oil production is pegged at 142,000 Boe/d.

The Zacks Consensus Estimate for the bottom line for the third quarter is pegged at a loss of 8 cents per share, indicating a 130.8% decline from the prior-year reported figure.

Devon Energy Corporation Price and EPS Surprise

Devon Energy Corporation Price and EPS Surprise

Devon Energy Corporation price-eps-surprise | Devon Energy Corporation Quote

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Devon this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here as you will see below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: The company has an Earnings ESP of +23.50%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Devon currently carries a Zacks Rank of 3.

Other Stocks to Consider

Investors can also consider the following players from the same industry that too have the right combination of elements to post an earnings beat in the to-be-reported quarter.

WPX Energy is set to release third-quarter earnings on Nov 3. It has an Earnings ESP of +40.21% and carries a Zacks Rank #3.

Cheniere Energy, Inc. (LNG - Free Report) is scheduled to release third-quarter 2020 numbers on Nov 6. It has an Earnings ESP of +31.36% and carries a Zacks Rank #3.

EOG Resources Inc. (EOG - Free Report) is slated to release third-quarter 2020 numbers on Nov 6. It has an Earnings ESP of +48.62% and carries a Zacks Rank 3.

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