Devon (DVN) Tops Q3 Earnings Estimates, Raises Guidance
Devon Energy Corp. DVN reported third-quarter 2019 adjusted earnings per share of 26 cents, which surpassed the Zacks Consensus Estimate of 19 cents by 36.8%.
Quarterly revenues of $1,847 million surpassed the Zacks Consensus Estimate of $1,567 million by 17.9%. However, total revenues declined 14.3% from the year-ago reported figure.
The top-line performance reflects lower contribution from marketing businesses and a decline in realized prices of hydrocarbons compared with the prior-year period.
Devon Energy Corporation Price, Consensus and EPS Surprise
Highlights of the Release
Total production (including divested U.S assets) in third-quarter 2019 touched 428,000 barrels of oil equivalent per day (Boe/d), a tad higher than the year-ago figure. Excluding production from divested assets, third-quarter total output was 325,000 Boe/d. Strong output from its Delaware assets boosted overall production.
Third-quarter oil production was 148,000 Boe/d, which is above the guided range of 141,000-147,000 Boe/d and 19% higher than the year-ago level.
Devon is progressing well with cost-saving initiatives and has lowered total expenses in the reported quarter by 23.8% year over year to $1,653 million. Its exit from higher-cost Canadian assets helped Devon in lowering expenses.
The company continues to advance the $5-billion share repurchase plan. Devon repurchased an aggregate of 147 million shares under the program for $4.8 billion. It expects to complete the repurchase program by the end of this year, which will surely have a positive impact on earnings. The company repurchased shares worth $550 million during third-quarter 2019.
Total realized prices — including cash settlements — were $27.73 per Boe in the reported quarter, down 6.1% year over year.
As of Sep 30, 2019, the company generated cash and cash equivalents of $1,375 million, down from $2,414 million recorded on Dec 31, 2018. As of Sep 30, 2019, its long-term debt amounted to $4,295 million, almost in line with $4,292 million on Dec 31, 2018.
Devon’s cash flow from operating activities in third-quarter 2019 was $597 million compared with $560 million in the year-ago period.
Devon estimates total oil production from retained assets for the fourth quarter of 2019 within 154,000-160,000 barrels per day. Total production in the quarter is expected in the range of 420,000-448,000 Boe/d.
It expects year-over-year growth in 2019 U.S. oil production in the range of 20-21%, indicating a 550-basis point improvement from original expectation.
Devon has lowered its view for 2019 G&A expenses to the range of $460-$470 million and financing costs to $245-$255 million. When compared with earlier expectations, the G&A and financing cost guidance represents a 17% and 22% decline, respectively.
It expects 2020 oil production to improve in the range of 7-9% from 2019 levels. In 2020, the company expects to lower shares outstanding by 6-8% from 2019 levels.
WPX Energy Inc.’s WPX third-quarter 2019 earnings of 9 cents per share missed the Zacks Consensus Estimate of 11 cents by 18.2%.
Murphy Oil Corporation MUR reported third quarter 2019 adjusted earnings of 36 cents per share, which beat the Zacks Consensus Estimate of 22 cents by 63.6%.
Occidental Petroleum Corporation OXY reported third-quarter 2019 earnings of 11 cents per share, lagging the Zacks Consensus Estimate of 41 cents by 73.2%.
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.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>
Click to get this free report
Devon Energy Corporation (DVN): Free Stock Analysis Report
WPX Energy, Inc. (WPX): Free Stock Analysis Report
Murphy Oil Corporation (MUR): Free Stock Analysis Report
Occidental Petroleum Corporation (OXY): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.