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Is a Beat in Store for Devon Energy's (DVN) Q1 Earnings?

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Devon Energy Corporation (DVN - Free Report) is expected to report first-quarter 2019 results on Apr 30, after market close. In the last reported quarter, the company delivered a negative earnings surprise of 67.74%.

Let’s see how things are shaping up prior to the earnings announcement.

What Our Quantitative Model Predicts

Our proven model indicates that Devon Energy is likely to beat estimates in the upcoming quarterly results. A stock needs to have both a positive Earnings ESP (which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass estimates. Devon Energy has the right mix.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP of the company is +7.80%.

Zacks Rank: Currently, Devon Energy carries a Zacks Rank #2, which increases the predictive power of ESP. This combination makes us increasingly optimistic of an earnings surprise this season.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Factors to Consider

Devon Energy is expected to benefit from higher level of activity in the STACK and Delaware Basin, which is likely to have a positive impact on first-quarter average daily oil production. The company estimates total first-quarter production from its assets within 478,000-514,000 barrels of oil equivalent per day.

First-quarter earnings are likely to benefit from lower shares outstanding and cost-reduction initiatives undertaken by the company. As of Feb 18, 2019, Devon Energy repurchased 90 million shares for a total cost of $3.4 billion, which is anticipated to have a positive impact on earnings per share.

The Zacks Consensus Estimate for first-quarter 2019 earnings is pegged at 29 cents per share, indicating a rise of 45% from the prior-year reported figure.

Stocks to Consider

In addition to Devon Energy, investors can also consider some other companies from the same industry, as these too have the right combination of elements to post an earnings beat in the upcoming releases:

CNX Resource Corporation (CNX - Free Report) is expected to release first-quarter results on Apr 30. It has an Earnings ESP of +1.42% and a Zacks Rank #3. You can the complete list of today’s Zacks #1 Rank stocks here.

WPX Energy Inc. is expected to release first-quarter results on May 1. It has an Earnings ESP of +3.02% and a Zacks Rank #3.
 
Apache Corporation (APA - Free Report) is scheduled to announce first-quarter results on May 1. It has an Earnings ESP of +6.67% and a Zacks Rank #2.

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