We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Devon Q3 Earnings Outpace Estimates on Higher Output, Revenues Miss
Read MoreHide Full Article
Key Takeaways
Devon's Q3 earnings beat estimates by 14.5%, while revenues rose 58.4% year over year but missed forecasts.
DVN's production jumped 95.5%, driven by the Coterra merger, with Permian output reaching 901,000 Boe/d.
Devon's operating cash flow rose 66.2% to $2.81B, while cash costs remained 2% below the guidance midpoint.
Devon Energy Corp. (DVN - Free Report) reported third-quarter 2026 adjusted earnings of $1.42 per share, beating the Zacks Consensus Estimate of $1.24 by 14.5%.
GAAP earnings were 88 cents per share, down 19.3% from $1.09 a year earlier.
Total Revenues
Revenues rose 58.4% year over year to $6.86 billion but missed the consensus estimate of $7.33 billion by 6.4%. The first full quarter following Devon's combination with Coterra delivered significantly higher production, led by the Permian Basin.
Oil, gas and natural gas liquids (NGL) sales totaled $5.94 billion, up 111.4% from $2.81 billion in the prior-year quarter. Marketing and midstream revenues rose 27.3% to $1.84 billion from $1.44 billion.
Commodity derivatives produced a $914 million loss compared to an $80 million gain a year ago. The latest figure included $729 million of negative valuation changes and $185 million of cash settlement losses, weighing on reported revenues.
Devon Energy Corporation Price, Consensus and EPS Surprise
Total production averaged 1,668,000 barrels of oil equivalent per day (Boe/d), up 95.5% from 853,000 Boe/d a year ago and within management's guidance. Oil volumes increased 41.8% to 553,000 barrels per day, while NGL production climbed 67.5% to 382,000 barrels per day.
Natural gas output jumped to 4.4 billion cubic feet per day from 1.41 billion a year earlier. Permian production averaged 901,000 Boe/d, including 389,000 barrels of oil per day. Eagle Ford oil volumes fell short of expectations because of completion timing, partly offset by stronger performance elsewhere.
DVN Realizes Higher Commodity Prices
Realized oil prices, including cash settlements, rose 24.3% year over year to $79.54 per barrel from $63.99. Excluding hedges, realized oil prices were $84.69 per barrel compared to $63.21 a year earlier.
NGL realizations, including settlements, increased 38.6% to $23.81 per barrel, while natural gas realizations advanced 36.7% to $2.16 per thousand cubic feet. Improved Permian takeaway capacity narrowed Waha price differentials and lifted unhedged gas realizations to 66% of Henry Hub.
Devon Maintains Cost and Capital Discipline
Production expenses increased to $1.65 billion from $895 million a year ago, reflecting a much larger operating base. Lease operating expenses totaled $764 million, while gathering, processing and transportation expenses were $490 million. General and administrative expenses rose to $180 million from $114 million.
Cash costs were $12.89 per Boe, about 2% below the midpoint of guidance. Capital expenditures, excluding acquisitions, totaled $1.5 billion, including $0.94 billion in the Permian. Devon brought 124 net operated wells online, with an average lateral length of 11,400 feet.
DVN Generates Cash and Returns Capital
Net cash from operations rose 66.2% year over year to $2.81 billion from $1.69 billion. Adjusted operating cash flow totaled $3.5 billion, supporting $2 billion of adjusted free cash flow and a 43% reinvestment rate.
Devon paid $366 million in dividends and repurchased 8.9 million shares for $414 million. It also retired a $750 million term loan. Quarter-end net debt stood at $10.22 billion, while the company held $413 million in cash, cash equivalents and restricted cash.
DVN Reaffirms 2026 Guidance, Details 2027 Plans
For the fourth quarter, Devon expects production of 1.66 million to 1.70 million Boe/d, including oil output of 550,000 to 560,000 barrels per day. Capital spending is projected at $1.29 billion to $1.4 billion.
Full-year 2026 guidance remains unchanged, with total production projected at 1.364 million to 1.398 million Boe/d and capital expenditures of $4.80 billion to $5.00 billion. Pro forma for the Eagle Ford sale, Devon anticipates approximately 525,000 barrels of oil per day and 1.60 million Boe/d of total production in 2027, supported by roughly $5.3 billion in capital spending.
ONEOK, Inc. (OKE - Free Report) reported third-quarter 2026 earnings of $2.13 per share, which beat the Zacks Consensus Estimate of $1.46 by 45.89%. The bottom line increased 43% from the year-ago quarter's figure of $1.49.
Operating revenues for the third quarter totaled $12.46 billion, which topped the Zacks Consensus Estimate of $11.77 billion by 5.81%. The top line improved 44.3% from $8.63 billion in the prior-year quarter.
TotalEnergies SE (TTE - Free Report) reported third-quarter 2026 operating earnings of $4.03 (€3.50) per share, which lagged the Zacks Consensus Estimate of $4.11 by 1.95%. The bottom line improved 127.7% from the year-ago figure of $1.77 (€1.50).
Total revenues were $66.82 billion, which rose 37.2% year over year and surpassed the Zacks Consensus Estimate of $53.72 billion by 24.39%.
CNX Resources Corporation (CNX - Free Report) reported third-quarter 2026 operating earnings of 61 cents per share, missing the Zacks Consensus Estimate of 65 cents by 6.2%.
CNX reported revenues of $373 million, lagging the Zacks Consensus Estimate of $400 million by 6.8%. Revenues declined 7.1% from $401 million in the year-ago quarter.
View the Zacks #1 Rank List
Image: Bigstock
Devon Q3 Earnings Outpace Estimates on Higher Output, Revenues Miss
Key Takeaways
Devon Energy Corp. (DVN - Free Report) reported third-quarter 2026 adjusted earnings of $1.42 per share, beating the Zacks Consensus Estimate of $1.24 by 14.5%.
GAAP earnings were 88 cents per share, down 19.3% from $1.09 a year earlier.
Total Revenues
Revenues rose 58.4% year over year to $6.86 billion but missed the consensus estimate of $7.33 billion by 6.4%. The first full quarter following Devon's combination with Coterra delivered significantly higher production, led by the Permian Basin.
Oil, gas and natural gas liquids (NGL) sales totaled $5.94 billion, up 111.4% from $2.81 billion in the prior-year quarter. Marketing and midstream revenues rose 27.3% to $1.84 billion from $1.44 billion.
Commodity derivatives produced a $914 million loss compared to an $80 million gain a year ago. The latest figure included $729 million of negative valuation changes and $185 million of cash settlement losses, weighing on reported revenues.
Devon Energy Corporation Price, Consensus and EPS Surprise
Devon Energy Corporation price-consensus-eps-surprise-chart | Devon Energy Corporation Quote
Devon's Production Surges After Coterra Merger
Total production averaged 1,668,000 barrels of oil equivalent per day (Boe/d), up 95.5% from 853,000 Boe/d a year ago and within management's guidance. Oil volumes increased 41.8% to 553,000 barrels per day, while NGL production climbed 67.5% to 382,000 barrels per day.
Natural gas output jumped to 4.4 billion cubic feet per day from 1.41 billion a year earlier. Permian production averaged 901,000 Boe/d, including 389,000 barrels of oil per day. Eagle Ford oil volumes fell short of expectations because of completion timing, partly offset by stronger performance elsewhere.
DVN Realizes Higher Commodity Prices
Realized oil prices, including cash settlements, rose 24.3% year over year to $79.54 per barrel from $63.99. Excluding hedges, realized oil prices were $84.69 per barrel compared to $63.21 a year earlier.
NGL realizations, including settlements, increased 38.6% to $23.81 per barrel, while natural gas realizations advanced 36.7% to $2.16 per thousand cubic feet. Improved Permian takeaway capacity narrowed Waha price differentials and lifted unhedged gas realizations to 66% of Henry Hub.
Devon Maintains Cost and Capital Discipline
Production expenses increased to $1.65 billion from $895 million a year ago, reflecting a much larger operating base. Lease operating expenses totaled $764 million, while gathering, processing and transportation expenses were $490 million. General and administrative expenses rose to $180 million from $114 million.
Cash costs were $12.89 per Boe, about 2% below the midpoint of guidance. Capital expenditures, excluding acquisitions, totaled $1.5 billion, including $0.94 billion in the Permian. Devon brought 124 net operated wells online, with an average lateral length of 11,400 feet.
DVN Generates Cash and Returns Capital
Net cash from operations rose 66.2% year over year to $2.81 billion from $1.69 billion. Adjusted operating cash flow totaled $3.5 billion, supporting $2 billion of adjusted free cash flow and a 43% reinvestment rate.
Devon paid $366 million in dividends and repurchased 8.9 million shares for $414 million. It also retired a $750 million term loan. Quarter-end net debt stood at $10.22 billion, while the company held $413 million in cash, cash equivalents and restricted cash.
DVN Reaffirms 2026 Guidance, Details 2027 Plans
For the fourth quarter, Devon expects production of 1.66 million to 1.70 million Boe/d, including oil output of 550,000 to 560,000 barrels per day. Capital spending is projected at $1.29 billion to $1.4 billion.
Full-year 2026 guidance remains unchanged, with total production projected at 1.364 million to 1.398 million Boe/d and capital expenditures of $4.80 billion to $5.00 billion. Pro forma for the Eagle Ford sale, Devon anticipates approximately 525,000 barrels of oil per day and 1.60 million Boe/d of total production in 2027, supported by roughly $5.3 billion in capital spending.
Devon Energy’s Zacks Rank
Devon currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Sector Releases
ONEOK, Inc. (OKE - Free Report) reported third-quarter 2026 earnings of $2.13 per share, which beat the Zacks Consensus Estimate of $1.46 by 45.89%. The bottom line increased 43% from the year-ago quarter's figure of $1.49.
Operating revenues for the third quarter totaled $12.46 billion, which topped the Zacks Consensus Estimate of $11.77 billion by 5.81%. The top line improved 44.3% from $8.63 billion in the prior-year quarter.
TotalEnergies SE (TTE - Free Report) reported third-quarter 2026 operating earnings of $4.03 (€3.50) per share, which lagged the Zacks Consensus Estimate of $4.11 by 1.95%. The bottom line improved 127.7% from the year-ago figure of $1.77 (€1.50).
Total revenues were $66.82 billion, which rose 37.2% year over year and surpassed the Zacks Consensus Estimate of $53.72 billion by 24.39%.
CNX Resources Corporation (CNX - Free Report) reported third-quarter 2026 operating earnings of 61 cents per share, missing the Zacks Consensus Estimate of 65 cents by 6.2%.
CNX reported revenues of $373 million, lagging the Zacks Consensus Estimate of $400 million by 6.8%. Revenues declined 7.1% from $401 million in the year-ago quarter.