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Devon Energy (DVN) Q1 Earnings Beat Estimates, Guidance Up

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Devon Energy Corp. (DVN - Free Report) reported first-quarter 2019 adjusted earnings per share of 36 cents, which surpassed the Zacks Consensus Estimate of 30 cents by 20%.

Quarterly revenues of $1,501 million lagged the Zacks Consensus Estimate of $2,522 million by 40.5%. Moreover, total revenues were down 31.7% from the year-ago figure of $2,198 million.

This year-over-year decline in revenues was due to lower contribution from upstream and marketing businesses.

Devon Energy Corporation Price, Consensus and EPS Surprise

Devon Energy Corporation Price, Consensus and EPS Surprise | Devon Energy Corporation Quote

Highlights of the Release

Total production in first-quarter 2019 touched 529,000 barrels of oil equivalent per day (Boe/d). Notably, the actual production was better than the company’s expected range of 478,000-514,000 Boe/d. Devon Energy’s strong production is attributable to growth in the Delaware Basin.

During the first quarter, the company continued to make progress via improving operating and corporate cost structure. Its largest field-level cost, lease operating expense, improved to $4.63 per barrels of oil equivalent (Boe) in the quarter. However, on a per-unit basis, lease operating expense declined 10% sequentially.

During the reported quarter, total expenses decreased 21.1% year over year to $1,928 million.
The company continues to advance its $5-billion share repurchase plan. The company has repurchased an aggregate of 114 million shares under the program for $4 billion. It expects to complete the repurchase program by end of this year, which will surely have a positive impact on earnings.

Realized Prices

Realized oil prices in the quarter were $43.02 per barrel, up 7.4% from $40.05 in the year-ago period. Realized prices of natural gas were down 8.5% to $2.36 per thousand cubic feet from $2.58 in the prior-year quarter.

Total realized prices, including cash settlements, were $29.01 per Boe, up 3.7% year over year.

Financial Health

As of Mar 31, 2019, the company generated cash and cash equivalents of $1,327 million, down from $2,414 million recorded on Dec 31, 2018. As of Mar 31, 2019, its long-term debt amounted to $5,786 million, almost in line with $5,785 million on Dec 31, 2018.

Devon Energy’s cash flow from operating activities in first-quarter 2019 was $377 million compared with $610 million in the year-ago period.

Devon Energy estimates total oil production from its assets for the second quarter of 2019 within 134,000-141,000 Boe/d.

It also expects 2019 light-oil production growth to reach 17% year over year, indicating a 200-basis point improvement from the year-ago reported figure.

E&P capital expenditure for 2019 is expected within $1.8-$2 billion, of which nearly 50% will be directed to strength its Delaware assets.

Other Releases

Anadarko Petroleum Corporation’s first-quarter 2019 adjusted earnings of 53 cents per share surpassed the Zacks Consensus Estimate of 30 cents by 76.7%.

TOTAL S.A. (TOT - Free Report) reported first-quarter 2019 operating earnings of $1.02 per share (€0.90 per share), which lagged the Zacks Consensus Estimate of $1.09 by 6.4%.

Cabot Oil & Gas Corporation (COG - Free Report) reported first-quarter 2019 earnings per share of 73 cents, surpassing the Zacks Consensus Estimate of 67 cents by 8.9%.

Zacks Rank

Devon Energy currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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