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Devon Energy (DVN) Up 9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Devon Energy (DVN - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Devon Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Devon Reports Break-Even Q4 Earnings, Raises View
Devon Energy Corp. reported break-even fourth-quarter 2020 adjusted earnings versus the Zacks Consensus Estimate of 5 cents per share. In the year-ago quarter, the company reported earnings of 33 cents per share.
GAAP loss for the fourth quarter was 27 cents compared with a loss of 25 cents per share in the year-ago period.
Revenues
Total revenues of $1,280 million outpaced the Zacks Consensus Estimate by 3.2%. The top line, however, declined 19.4% from the year-ago figure due to fall in commodity prices.
Production
Total net production for fourth-quarter 2020 touched 3333,000 barrels of oil equivalent per day (Boe/d), which was near the higher end of the guided range of 318,000-334,000 Boe/d and was up 2.1% sequentially. Oil production averaged 156,000 barrels per day (Bbl/d), which decreased 4.3% on a year-over-year basis. However, Delaware Basin assets’ performance remained solid and oil production from this region was up 17.9% year over year.
Natural gas liquids production was up 8.1% year over year.
Realized Prices
Realized oil prices for the quarter were $38.01 per barrel, down 33.2% from $56.89 in the year-ago period. Realized prices for natural gas liquids were also down 15.8% to $14.76 per barrel from $17.54 in the prior-year quarter.
Realized gas prices were up 7.1% to $1.96 per thousand cubic feet from $1.83 in the prior-year quarter.
Total oil equivalent realized prices — including cash settlements — were $24.77 per Boe, down 27.4% year over year.
Other Highlights
Total production expenses for the fourth quarter were $271 million, decreasing 16.4% year over year. The decline in expenses was due to improved cost structure due to lower lease operating expenses resulting from more efficient field-level operations and a decrease in production tax due to reduced commodity prices.
Devon Energy’s legacy estimated proved reserves were 752 million Boe at 2020-end. Drilling programs successfully added 135 million Boe of reserves through extensions and discoveries in 2020.
On Oct 1, Devon completed the sale of Barnett Shale assets and received a cash payment of $320 million at closing.
Financial Highlights
As of Dec 31, 2020, the company had cash and cash equivalents including restricted cash of $2,237 million, up from $1, 8444 million in the corresponding period of 2019. It exited the fourth quarter with $5.6 billion of liquidity and no debt maturities till 2025.
As of Dec 31, 2020, long-term debt amounted to $4,298 million, up marginally from $4,294 million in the comparable period of 2019.
Devon Energy’s net cash from operating activities for fourth-quarter 2020 was $358 million, down 38.1% from the year-ago period.
Guidance
Devon Energy revised its preliminary oil production guidance for 2021 of 280,000 Bbl/d to the range of 280,000-300,000 BBl/d. The company raised its 2021 oil production view, taking into account strong performance from Delaware Basin assets. For 2021, total production is expected in the range of 543,000-580,000 Boe/d.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 48.54% due to these changes.
VGM Scores
At this time, Devon Energy has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Devon Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Devon Energy (DVN) Up 9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Devon Energy (DVN - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Devon Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Devon Reports Break-Even Q4 Earnings, Raises View
Devon Energy Corp. reported break-even fourth-quarter 2020 adjusted earnings versus the Zacks Consensus Estimate of 5 cents per share. In the year-ago quarter, the company reported earnings of 33 cents per share.
GAAP loss for the fourth quarter was 27 cents compared with a loss of 25 cents per share in the year-ago period.
Revenues
Total revenues of $1,280 million outpaced the Zacks Consensus Estimate by 3.2%. The top line, however, declined 19.4% from the year-ago figure due to fall in commodity prices.
Production
Total net production for fourth-quarter 2020 touched 3333,000 barrels of oil equivalent per day (Boe/d), which was near the higher end of the guided range of 318,000-334,000 Boe/d and was up 2.1% sequentially. Oil production averaged 156,000 barrels per day (Bbl/d), which decreased 4.3% on a year-over-year basis. However, Delaware Basin assets’ performance remained solid and oil production from this region was up 17.9% year over year.
Natural gas liquids production was up 8.1% year over year.
Realized Prices
Realized oil prices for the quarter were $38.01 per barrel, down 33.2% from $56.89 in the year-ago period. Realized prices for natural gas liquids were also down 15.8% to $14.76 per barrel from $17.54 in the prior-year quarter.
Realized gas prices were up 7.1% to $1.96 per thousand cubic feet from $1.83 in the prior-year quarter.
Total oil equivalent realized prices — including cash settlements — were $24.77 per Boe, down 27.4% year over year.
Other Highlights
Total production expenses for the fourth quarter were $271 million, decreasing 16.4% year over year. The decline in expenses was due to improved cost structure due to lower lease operating expenses resulting from more efficient field-level operations and a decrease in production tax due to reduced commodity prices.
Devon Energy’s legacy estimated proved reserves were 752 million Boe at 2020-end. Drilling programs successfully added 135 million Boe of reserves through extensions and discoveries in 2020.
On Oct 1, Devon completed the sale of Barnett Shale assets and received a cash payment of $320 million at closing.
Financial Highlights
As of Dec 31, 2020, the company had cash and cash equivalents including restricted cash of $2,237 million, up from $1, 8444 million in the corresponding period of 2019. It exited the fourth quarter with $5.6 billion of liquidity and no debt maturities till 2025.
As of Dec 31, 2020, long-term debt amounted to $4,298 million, up marginally from $4,294 million in the comparable period of 2019.
Devon Energy’s net cash from operating activities for fourth-quarter 2020 was $358 million, down 38.1% from the year-ago period.
Guidance
Devon Energy revised its preliminary oil production guidance for 2021 of 280,000 Bbl/d to the range of 280,000-300,000 BBl/d. The company raised its 2021 oil production view, taking into account strong performance from Delaware Basin assets. For 2021, total production is expected in the range of 543,000-580,000 Boe/d.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted 48.54% due to these changes.
VGM Scores
At this time, Devon Energy has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Devon Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.