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Can Focus on Domestic Oil Support Devon's (DVN) Q2 Earnings?
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Devon Energy Corporation (DVN - Free Report) is expected to beat on earnings when it reports second-quarter results on Jul 31, 2018 after the market closes. In the prior quarter, the company delivered a positive earnings surprise of 5.26%.
What Our Quantitative Model Predicts
Our proven model shows 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, and Devon Energy has the right mix. You can the complete list of today’s Zacks #1 Rank stocks here.
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 pegged at +4.63%. This is because the Most Accurate Estimate is 36 cents, higher than the Zacks Consensus Estimate of 35 cents.
Zacks Rank: Currently, Devon Energy carries a Zacks Rank #3. The combination of Devon Energy’s favorable Zacks Rank and a positive ESP makes us reasonably confident of a positive earnings surprise.
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 estimates total production from its assets for the second quarter of 2018 in the range of 524,000-549,000 barrels of oil equivalent (Boe) per day, while the Zacks Consensus Estimate for second-quarter total production is pegged at nearly 529,000 Boe a day. Devon Energy’s enhanced production can be attributed to strong contribution from the domestic-resource plays and it’s shifting focus toward high-margin production regions.
The expected improvement in the commodity prices is likely to positively impact Devon Energy’s results. Total realized price, including cash settlements at the end of second-quarter 2017, was $24.94 per Boe. Total realized price for the second quarter is estimated at $27.61 Boe.
Second-quarter results are likely to be favored by the cost-reduction initiatives undertaken by the company. Devon’s plan to lower debts from non-core asset sell proceeds will also have a positive impact on margins.
Other Stocks to Consider
In addition to Devon Energy, here are some other companies from the same industry that you may also want to consider as these have the right combination of elements to post an earnings beat:
Cheniere Energy, Inc. (LNG - Free Report) is expected to release second-quarter results on Aug 9. It has an Earnings ESP of +4.26% and sports a Zacks Rank #1.
Penn Virginia Corporation is scheduled to announce second-quarter results on Aug 7. It has an Earnings ESP of +6.72% and a Zacks Rank #1.
Murphy Oil Corporation (MUR - Free Report) is expected to release second-quarter results on Aug 8. It has an Earnings ESP of +5.99% and a Zacks Rank #2.
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Can Focus on Domestic Oil Support Devon's (DVN) Q2 Earnings?
Devon Energy Corporation (DVN - Free Report) is expected to beat on earnings when it reports second-quarter results on Jul 31, 2018 after the market closes. In the prior quarter, the company delivered a positive earnings surprise of 5.26%.
What Our Quantitative Model Predicts
Our proven model shows 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, and Devon Energy has the right mix. You can the complete list of today’s Zacks #1 Rank stocks here.
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 pegged at +4.63%. This is because the Most Accurate Estimate is 36 cents, higher than the Zacks Consensus Estimate of 35 cents.
Devon Energy Corporation Price and EPS Surprise
Devon Energy Corporation Price and EPS Surprise | Devon Energy Corporation Quote
Zacks Rank: Currently, Devon Energy carries a Zacks Rank #3. The combination of Devon Energy’s favorable Zacks Rank and a positive ESP makes us reasonably confident of a positive earnings surprise.
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 estimates total production from its assets for the second quarter of 2018 in the range of 524,000-549,000 barrels of oil equivalent (Boe) per day, while the Zacks Consensus Estimate for second-quarter total production is pegged at nearly 529,000 Boe a day. Devon Energy’s enhanced production can be attributed to strong contribution from the domestic-resource plays and it’s shifting focus toward high-margin production regions.
The expected improvement in the commodity prices is likely to positively impact Devon Energy’s results. Total realized price, including cash settlements at the end of second-quarter 2017, was $24.94 per Boe. Total realized price for the second quarter is estimated at $27.61 Boe.
Second-quarter results are likely to be favored by the cost-reduction initiatives undertaken by the company. Devon’s plan to lower debts from non-core asset sell proceeds will also have a positive impact on margins.
Other Stocks to Consider
In addition to Devon Energy, here are some other companies from the same industry that you may also want to consider as these have the right combination of elements to post an earnings beat:
Cheniere Energy, Inc. (LNG - Free Report) is expected to release second-quarter results on Aug 9. It has an Earnings ESP of +4.26% and sports a Zacks Rank #1.
Penn Virginia Corporation is scheduled to announce second-quarter results on Aug 7. It has an Earnings ESP of +6.72% and a Zacks Rank #1.
Murphy Oil Corporation (MUR - Free Report) is expected to release second-quarter results on Aug 8. It has an Earnings ESP of +5.99% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>