Devon Energy shares drop 12% on disappointing earnings

By Liz Hampton

DENVER, Feb 15 (Reuters) - Shares of U.S. shale oil producer Devon Energy DVN.N fell more than 12% at midday Wednesday after the company reported fourth quarter earnings that missed analysts' forecast on higher-than-expected expenses and lower production.

The current quarter's production will be 10,000 barrels of oil and gas per day (boepd) lower than expected, it warned, in part due to a fire a key gas compression station in Texas in late January. Shares were down $7.92 at $56.01 apiece.

The fire-hit gas compression facility will resume operations at the end of the first quarter, executives said during anearnings callon Wednesday.

Wall Street analysts had a negative view of the results, pointing to higher capital spending, lower production and a profit miss.

"Disappointing print on Q4," wrote analysts for Tudor, Pickering, Holt & Co, pointing to capital expenditures, which at $3.7 billion is 5% above expectations, as well as lower earnings and free cash flow.

"2023 outlook disappoints what had already been tempered expectations," they added.

The higher spending comes as Devon is temporarily adding a fourth hydraulic fracturing crew this quarter to make up for output losses due to third party outages.

The company posted adjusted earnings of $1.66 per share for the fourth-quarter versus analysts' expectations of $1.75 a share, according to Refinitiv data.

(Reporting by Liz Hampton in Denver)

((Liz.Hampton@thomsonreuters.com; +1 832 571 8115; Reuters Messaging: Reuters Messaging: liz.hampton.reuters@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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