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Devon Energy (DVN) Q2 Earnings and Revenues Beat Estimates

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Devon Energy Corp. (DVN - Free Report) reported second-quarter 2022 adjusted earnings of $2.59 per share, beating the Zacks Consensus Estimate of $2.38 by 8.8%. Second-quarter earnings were ahead of our estimate of $2.06 per share. Earnings were up 331.7% from the year-ago quarter. The year-over-year improvement was due to the company’s oil-weighted production mix, as well as a recovery in commodity prices.

GAAP earnings for the second quarter were $2.93 compared with 38 cents per share in the year-ago period.

Revenues

Total revenues of $5,626 million surpassed the Zacks Consensus Estimate by 17.3%. Total revenues were better than our estimate of $4,555.3 million. The top line improved 132.8% from the year-ago figure.

Devon Energy Corporation Price, Consensus and EPS Surprise

 

Devon Energy Corporation Price, Consensus and EPS Surprise

Devon Energy Corporation price-consensus-eps-surprise-chart | Devon Energy Corporation Quote

Production

Total net production for second-quarter 2022 touched 616,000 barrels of oil equivalent per day (Boe/d), up 8.6% year over year. Second-quarter production exceeded the company’s guidance of 585,000-604,000 Boe/d. Total production for the quarter was driven by high-margin production growth in the Delaware Basin.

Oil production averaged 300,000 barrels per day (Bbl/d), which increased 3.1% on a year-over-year basis primarily due to strong contributions from the Delaware Basin assets. Natural gas liquids production was also up 20.9% year over year to 156,000 BBl/d.

Realized Prices

Realized oil prices for the quarter were $95.80 per barrel, up 90.3% from $50.34 in the year-ago period. Realized prices for natural gas liquids were up 70.4% to $40.28 per barrel from $23.64 in the prior-year quarter.

Realized gas prices were up 130% to $5.06 per thousand cubic feet from $2.2 in the prior-year quarter.

Total oil equivalent realized prices — including cash settlements — were $64.7 per Boe, up 86.7% year over year.

Other Highlights

Total production expenses for the second quarter were $729 million, increasing 42.1% year over year.

Devon Energy’s share-repurchase authorization is $2 billion, which is equivalent to 5% of the company’s market capitalization. The board of directors approved a 13% increase of the fixed quarterly dividend of DVN to 18 cents.

Devon Energy’s free cash flow for second-quarter 2022 was $2.1 billion. Financing costs for the reported quarter were $84 million, up 5% from $80 million in the year-ago period.

Financial Highlights

As of Jun 30, 2022, the company had cash and cash equivalents, including restricted cash, of $3,457 million, up from $2,271 million as of Dec 31, 2021. Total liquidity as of Jun 30, 2022, was $6,500 million, which includes cash of $3.5 billion.

As of Jun 30, 2022, long-term debt amounted to $6,461 million, down from $6,482 million as of Dec 31, 2021.

Devon Energy’s net cash from operating activities for second-quarter 2022 was $2,678 million compared with $1,093 million in the year-ago period. Capital expenditure was $580 million in the second quarter compared with $509 million in the year-ago quarter.

Guidance

Devon Energy expects total production of 593,000-613,000 Boe/d for the third quarter. Third-quarter capital expenditure is projected to be $680-$755 million.

Devon Energy reiterated its 2022 total production guidance at 600,000-610,000 Boe/d and upstream capital investment at $2.2-$2.4 billion. Total capital expenditure for 2022 is expected to be $2.4-$2.64 billion.

Zacks Rank

Devon Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Occidental Petroleum Corporation (OXY - Free Report) is scheduled to report second-quarter 2022 results on Aug 2. The Zacks Consensus Estimate for earnings for the quarter is pegged at $2.93 per share.

Occidental’s long-term earnings growth is projected at 12.4%. The Zacks Consensus Estimate for OXY’s 2022 earnings per share indicates year-over-year growth of 309.4%.

Cheniere Energy, Inc. (LNG - Free Report) is scheduled to report second-quarter 2022 results on May 4. The Zacks Consensus Estimate for earnings for the quarter is pegged at $2.83 per share.

Cheniere Energy’s long-term (three to five years) earnings growth is projected at 55.4%. The Zacks Consensus Estimate for LNG’s 2022 earnings per share indicates year-over-year growth of 274.5%.

ConocoPhillips (COP - Free Report) is scheduled to report second-quarter 2022 results on Aug 4. The Zacks Consensus Estimate for earnings for the quarter is pegged at $3.78 per share.

ConocoPhillips’ long-term (three to five years) earnings growth is projected at 20.7%. The Zacks Consensus Estimate for LNG’s 2022 earnings per share indicates year-over-year growth of 143.6%.

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