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Devon Energy (DVN) Up 11.7% 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 11.7% 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 drivers.
Devon Energy Q2 Earnings & Revenues Surpass Estimates
Devon Energy Corp. reported second-quarter 2021 adjusted earnings of 60 cents, beating the Zacks Consensus Estimate of 53 cents per share by 13.2%. In the year-ago quarter, the company incurred a loss of 18 cents per share.
GAAP earnings for the second quarter were 38 cents compared with 32 cents per share in the year-ago period.
Revenues
Total revenues of $2,417 million surpassed the Zacks Consensus Estimate by 1.5%. The top line also improved 17.9% from the year-ago figure.
Production
Total net production for second-quarter 2021 touched 567,000 barrels of oil equivalent per day (Boe/d), up 74.5% year over year. Oil production averaged 291,000 barrels per day (Bbl/d), which increased 90.2% on a year-over-year basis, primarily due to strong contribution from Delaware and Williston Basin assets. Natural gas liquids production was also up 86.9% year over year.
Realized Prices
Realized oil prices for the quarter were $50.34 per barrel, up 37.9% from $36.5 in the year-ago period. Realized prices for natural gas liquids were up 151.5% to $23.64 per barrel from $9.4 in the prior-year quarter.
Realized gas prices were up 40.1% to $2.2 per thousand cubic feet from $1.57 in the prior-year quarter.
Total oil equivalent realized prices — including cash settlements — were $34.64 per Boe, up 56% year over year.
Other Highlights
Total production expenses for the second quarter were $513 million, increasing 95% year over year. With capital programs focused on developing higher-margin production opportunities, oil and natural gas liquid volumes accounted for 74% of Devon Energy’s product mix for the quarter.
Financing costs for the reported quarter were $80 million, up from $69 million in the year-ago period.
Financial Highlights
As of Jun 30, 2021, the company had cash and cash equivalents including restricted cash of $1,539 million, up from $2,237 million on Dec 31, 2020. It exited the second quarter with $4.5 billion of liquidity and no debt maturities till 2023.
As of Jun 30, 2021, long-term debt amounted to $6,502 million, up from $4,298 million on Dec 31, 2020.
Devon Energy’s net cash from operating activities for second-quarter 2021 was $1,093 million compared with $150 million in the year-ago period.
Guidance
It expects total production for the third quarter in the range of 566,000-594,000 Boe/d.
Devon Energy’s oil production guidance for 2021 is projected in the range of 280,000-290,000 BBl/d. For 2021, total production is expected in the range of 539,000-569,000 Boe/d.
Capital expenditure for 2021 is expected within $1,720-$1,980 million, including upstream expenditure in the range of $1,600-$1,800 million. Third-quarter expenditure is projected in the range of $420-$490 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Devon Energy has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. It comes with little surprise Devon Energy has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Devon Energy (DVN) Up 11.7% 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 11.7% 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 drivers.
Devon Energy Q2 Earnings & Revenues Surpass Estimates
Devon Energy Corp. reported second-quarter 2021 adjusted earnings of 60 cents, beating the Zacks Consensus Estimate of 53 cents per share by 13.2%. In the year-ago quarter, the company incurred a loss of 18 cents per share.
GAAP earnings for the second quarter were 38 cents compared with 32 cents per share in the year-ago period.
Revenues
Total revenues of $2,417 million surpassed the Zacks Consensus Estimate by 1.5%. The top line also improved 17.9% from the year-ago figure.
Production
Total net production for second-quarter 2021 touched 567,000 barrels of oil equivalent per day (Boe/d), up 74.5% year over year. Oil production averaged 291,000 barrels per day (Bbl/d), which increased 90.2% on a year-over-year basis, primarily due to strong contribution from Delaware and Williston Basin assets. Natural gas liquids production was also up 86.9% year over year.
Realized Prices
Realized oil prices for the quarter were $50.34 per barrel, up 37.9% from $36.5 in the year-ago period. Realized prices for natural gas liquids were up 151.5% to $23.64 per barrel from $9.4 in the prior-year quarter.
Realized gas prices were up 40.1% to $2.2 per thousand cubic feet from $1.57 in the prior-year quarter.
Total oil equivalent realized prices — including cash settlements — were $34.64 per Boe, up 56% year over year.
Other Highlights
Total production expenses for the second quarter were $513 million, increasing 95% year over year. With capital programs focused on developing higher-margin production opportunities, oil and natural gas liquid volumes accounted for 74% of Devon Energy’s product mix for the quarter.
Financing costs for the reported quarter were $80 million, up from $69 million in the year-ago period.
Financial Highlights
As of Jun 30, 2021, the company had cash and cash equivalents including restricted cash of $1,539 million, up from $2,237 million on Dec 31, 2020. It exited the second quarter with $4.5 billion of liquidity and no debt maturities till 2023.
As of Jun 30, 2021, long-term debt amounted to $6,502 million, up from $4,298 million on Dec 31, 2020.
Devon Energy’s net cash from operating activities for second-quarter 2021 was $1,093 million compared with $150 million in the year-ago period.
Guidance
It expects total production for the third quarter in the range of 566,000-594,000 Boe/d.
Devon Energy’s oil production guidance for 2021 is projected in the range of 280,000-290,000 BBl/d. For 2021, total production is expected in the range of 539,000-569,000 Boe/d.
Capital expenditure for 2021 is expected within $1,720-$1,980 million, including upstream expenditure in the range of $1,600-$1,800 million. Third-quarter expenditure is projected in the range of $420-$490 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Devon Energy has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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. It comes with little surprise Devon Energy has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.