We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
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 Energy (DVN) Down 11% Since Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Devon Energy Corporation (DVN - Free Report) . Shares have lost nearly 11% in the past month, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Devon Energy Q1 Earnings & Revenues Beat Estimates
Devon Energy Corp. reported first-quarter 2017 adjusted earnings per share of $0.41, beating the Zacks Consensus Estimate of $0.40 by $0.01. Notably, the company had reported a loss of $0.53 in the prior-year quarter.
The year-over-year improvement was attributable to strong production growth, higher commodity prices and an improved cost structure.
On a GAAP basis, the company reported earnings of $1.07 per share, while the year-ago quarter figure reflected a loss of $6.44. The difference between operating and GAAP figures in the reported quarter was due to gain from deferred tax valuation allowance of $0.32 and foreign currency adjustments of $0.36. The gains were marginally offset by loss of $0.01 each from asset sales as well as asset impairments.
Revenues
Devon’s quarterly revenues of $3,547 million surpassed the Zacks Consensus Estimate of $2,977 million by 18.9%. Total revenue was also up 66.8% from the year-ago figure of $2,126 million.
Highlights of the Release
In the first quarter of 2017, total production touched 563,000 barrels of oil equivalent (Boe) per day, higher than the guidance range of 535,000–555,000 boe per day provided by the company. Solid production from U.S. assets and Canada heavy oil resulted in the stronger-than-expected production.
At the field level, the company is effectively controlling costs. Thanks to its initiatives, lease operating expenses (LOE) were down 13.1% year over year to $386 million.
Total operating expenses in the reported quarter is $2,841 million, down 49.5% from $5,626 million spent in the year-ago quarter.
Operating income in the reported quarter was $706 million. In the year-ago quarter, the company had incurred operating loss of $3,500 million.
Realized Prices
Realized oil prices in the quarter were $37.83 per barrel, up 88.6% from $20.06 per barrel in the year-ago quarter. Realized prices for natural gas were up 59.6% to $2.65 per thousand cubic feet (Mcf) from $1.66 in the year-ago quarter.
Total realized prices in the first quarter, including cash settlements, were $25.97 per boe, up 91.9% year over year due to higher commodities prices.
Financial Health
As of Mar 31, 2017, the company had a cash balance of $2,119 million, up from $1,959 million as of Dec 31, 2016.
Long-term debt as of Mar 31, 2016 was $10,381 million, compared with $10,154 million as of Dec 31, 2016.
Devon’s cash flow from operating activities in first-quarter 2017 was $834 million, compared with $165 million in the year ago quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to seven lower. In the past month, the consensus estimate has shifted downward by 12.8% due to these changes.
At this time, Devon Energy's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Devon Energy (DVN) Down 11% Since Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Devon Energy Corporation (DVN - Free Report) . Shares have lost nearly 11% in the past month, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Devon Energy Q1 Earnings & Revenues Beat Estimates
Devon Energy Corp. reported first-quarter 2017 adjusted earnings per share of $0.41, beating the Zacks Consensus Estimate of $0.40 by $0.01. Notably, the company had reported a loss of $0.53 in the prior-year quarter.
The year-over-year improvement was attributable to strong production growth, higher commodity prices and an improved cost structure.
On a GAAP basis, the company reported earnings of $1.07 per share, while the year-ago quarter figure reflected a loss of $6.44. The difference between operating and GAAP figures in the reported quarter was due to gain from deferred tax valuation allowance of $0.32 and foreign currency adjustments of $0.36. The gains were marginally offset by loss of $0.01 each from asset sales as well as asset impairments.
Revenues
Devon’s quarterly revenues of $3,547 million surpassed the Zacks Consensus Estimate of $2,977 million by 18.9%. Total revenue was also up 66.8% from the year-ago figure of $2,126 million.
Highlights of the Release
In the first quarter of 2017, total production touched 563,000 barrels of oil equivalent (Boe) per day, higher than the guidance range of 535,000–555,000 boe per day provided by the company. Solid production from U.S. assets and Canada heavy oil resulted in the stronger-than-expected production.
At the field level, the company is effectively controlling costs. Thanks to its initiatives, lease operating expenses (LOE) were down 13.1% year over year to $386 million.
Total operating expenses in the reported quarter is $2,841 million, down 49.5% from $5,626 million spent in the year-ago quarter.
Operating income in the reported quarter was $706 million. In the year-ago quarter, the company had incurred operating loss of $3,500 million.
Realized Prices
Realized oil prices in the quarter were $37.83 per barrel, up 88.6% from $20.06 per barrel in the year-ago quarter. Realized prices for natural gas were up 59.6% to $2.65 per thousand cubic feet (Mcf) from $1.66 in the year-ago quarter.
Total realized prices in the first quarter, including cash settlements, were $25.97 per boe, up 91.9% year over year due to higher commodities prices.
Financial Health
As of Mar 31, 2017, the company had a cash balance of $2,119 million, up from $1,959 million as of Dec 31, 2016.
Long-term debt as of Mar 31, 2016 was $10,381 million, compared with $10,154 million as of Dec 31, 2016.
Devon’s cash flow from operating activities in first-quarter 2017 was $834 million, compared with $165 million in the year ago quarter.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to seven lower. In the past month, the consensus estimate has shifted downward by 12.8% due to these changes.
Devon Energy Corporation Price and Consensus
Devon Energy Corporation Price and Consensus | Devon Energy Corporation Quote
VGM Scores
At this time, Devon Energy's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.