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Devon Energy Corp. (DVN - Free Report) reported third-quarter 2017 adjusted earnings per share of 46 cents, beating the Zacks Consensus Estimate of 39 cents by 17.9%. Notably, the company had reported earnings of 9 cents in the prior-year quarter.
On a GAAP basis, the company reported earnings of 43 cents per diluted share, while in the year-ago quarter, the company reported earnings of $1.90. The difference between operating and GAAP figures in the reported quarter was due to a gain from deferred tax-valuation allowance of 5 cents and a loss of 8 cents from foreign currency adjustments.
Revenues
Devon’s quarterly revenues of $3,156 million surpassed the Zacks Consensus Estimate of $3,150 million by 0.2%. However, total revenues were down 25.4% from the year-ago figure of $4,233 million.
Devon Energy Corporation Price, Consensus and EPS Surprise
In the third quarter of 2017, total production touched 527,000 barrels of oil equivalent (Boe) per day. The production exceeded the midpoint of the company’s Hurricane Harvey-adjusted guidance by 6,000 Boe per day.
The recent storms lowered U.S. production by nearly 15,000 boe per day. Even then production from U.S. assets contributed 76.5% of the total production.
Devon’s midstream business generated operating profits of $242 million in the third quarter, expanding by 9% on a year-to-date basis compared with 2016. This growth was driven entirely by Devon’s strategic investment in EnLink Midstream.
Operating income in the reported quarter was $326 million compared with $1,465 million in the year-ago quarter.
Realized Prices
Realized oil prices in the quarter were $39.9 per barrel, up 20.5% from $33.11 per barrel in the year-ago quarter. Realized prices for natural gas were up 16.8% to $2.57 per thousand cubic feet (Mcf) from $2.20 per Mcf in the year-ago quarter.
Total realized prices in the third quarter, including cash settlements, were $26.19 per boe, up 22.9% year over year due to higher commodities prices.
Financial Health
As of Sep 30, the company had a cash balance of $4,622 million, up from $3,772 million as of Dec 31, 2016. Long-term debt was $10,383 million compared with $10,154 million as of Dec 31, 2016.
Devon’s cash flow from operating activities in third-quarter 2017 was $776 million compared with $727 million in the year-ago quarter. Capital expenditure was $735 million, higher than $421 million a year ago.
Guidance
Devon estimates total production from its assets in the fourth quarter of 2017 to be in the range of 551,000-571,000 boe per day.
Capital expenditure (capex) in the fourth quarter of 2017 is expected in the range of $740-$815 million. Devon has also provided its fourth-quarter Lease Operating Expenses outlook in the range of $360-$410 million.
Devon expects its total production in 2017 to be 30% higher than the 2016-levels, driven by strong contributions from its STACK and Delaware Basin Assets.
Devon’s Exploration & Production capital program in 2018 is expected to range from $2.0 billion to $2.5 billion.
Peer Releases
Anadarko Petroleum Corporation reported third-quarter 2017 adjusted loss of 77 cents per share, much wider than the Zacks Consensus Estimate of a loss of 56 cents.
Noble Energy, Inc. incurred adjusted loss of 2 cents per share for the third quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 13 cents.
Range Resource Corporation (RRC - Free Report) reported third-quarter earnings of 5 cents, surpassing the Zacks Consensus Estimate of 2 cents by 150.0%.
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Devon (DVN) Beats Q3 Earnings Estimates, Issues Guidance
Devon Energy Corp. (DVN - Free Report) reported third-quarter 2017 adjusted earnings per share of 46 cents, beating the Zacks Consensus Estimate of 39 cents by 17.9%. Notably, the company had reported earnings of 9 cents in the prior-year quarter.
On a GAAP basis, the company reported earnings of 43 cents per diluted share, while in the year-ago quarter, the company reported earnings of $1.90. The difference between operating and GAAP figures in the reported quarter was due to a gain from deferred tax-valuation allowance of 5 cents and a loss of 8 cents from foreign currency adjustments.
Revenues
Devon’s quarterly revenues of $3,156 million surpassed the Zacks Consensus Estimate of $3,150 million by 0.2%. However, total revenues were down 25.4% from the year-ago figure of $4,233 million.
Devon Energy Corporation Price, Consensus and EPS Surprise
Devon Energy Corporation Price, Consensus and EPS Surprise | Devon Energy Corporation Quote
Highlights of the Release
In the third quarter of 2017, total production touched 527,000 barrels of oil equivalent (Boe) per day. The production exceeded the midpoint of the company’s Hurricane Harvey-adjusted guidance by 6,000 Boe per day.
The recent storms lowered U.S. production by nearly 15,000 boe per day. Even then production from U.S. assets contributed 76.5% of the total production.
Devon’s midstream business generated operating profits of $242 million in the third quarter, expanding by 9% on a year-to-date basis compared with 2016. This growth was driven entirely by Devon’s strategic investment in EnLink Midstream.
Operating income in the reported quarter was $326 million compared with $1,465 million in the year-ago quarter.
Realized Prices
Realized oil prices in the quarter were $39.9 per barrel, up 20.5% from $33.11 per barrel in the year-ago quarter. Realized prices for natural gas were up 16.8% to $2.57 per thousand cubic feet (Mcf) from $2.20 per Mcf in the year-ago quarter.
Total realized prices in the third quarter, including cash settlements, were $26.19 per boe, up 22.9% year over year due to higher commodities prices.
Financial Health
As of Sep 30, the company had a cash balance of $4,622 million, up from $3,772 million as of Dec 31, 2016. Long-term debt was $10,383 million compared with $10,154 million as of Dec 31, 2016.
Devon’s cash flow from operating activities in third-quarter 2017 was $776 million compared with $727 million in the year-ago quarter. Capital expenditure was $735 million, higher than $421 million a year ago.
Guidance
Devon estimates total production from its assets in the fourth quarter of 2017 to be in the range of 551,000-571,000 boe per day.
Capital expenditure (capex) in the fourth quarter of 2017 is expected in the range of $740-$815 million. Devon has also provided its fourth-quarter Lease Operating Expenses outlook in the range of $360-$410 million.
Devon expects its total production in 2017 to be 30% higher than the 2016-levels, driven by strong contributions from its STACK and Delaware Basin Assets.
Devon’s Exploration & Production capital program in 2018 is expected to range from $2.0 billion to $2.5 billion.
Peer Releases
Anadarko Petroleum Corporation reported third-quarter 2017 adjusted loss of 77 cents per share, much wider than the Zacks Consensus Estimate of a loss of 56 cents.
Noble Energy, Inc. incurred adjusted loss of 2 cents per share for the third quarter of 2017, narrower than the Zacks Consensus Estimate of a loss of 13 cents.
Range Resource Corporation (RRC - Free Report) reported third-quarter earnings of 5 cents, surpassing the Zacks Consensus Estimate of 2 cents by 150.0%.
Zacks Rank
Devon has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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