A month has gone by since the last earnings report for Devon Energy (DVN). Shares have lost about 0.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Devon Energy due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Devon Energy's Q1 Earnings Beat Estimates, Coterra Merger on Course
Devon Energy Corp. reported first-quarter 2026 earnings per share (EPS) of $1.04, surpassing the Zacks Consensus Estimate of $1 by 4%. The metric was down 14% year over year.
GAAP EPS in the reported quarter was 19 cents compared with 77 cents in the year-ago quarter. The difference between GAAP and operating earnings in the first quarter was due to an impact of 81 cents from fair value changes in financial instruments, 1 cent for asset and exploration impairments, and 3 cents from restructuring and transaction costs.
DVN’s Q1 Revenue Details
Total revenues for the quarter were $3.80 billion, which lagged the Zacks Consensus Estimate of $4.16 billion by 8.5%. The top line decreased 14.5% from the year-ago quarter’s figure
Production at DVN
Net production in the first quarter totaled 833,000 barrels of oil equivalent per day (Boe/d), up 2.2% year over year. The production volume was within the guided range of 823,000-843,000 Boe/d. Improvement in production volumes from the Delaware Basin boosted the metric.
Natural gas liquids production increased 7.4% year over year to 218,000 barrels per day (Bbl/d). Oil production amounted to 387,000 Bbl/d, down marginally by 0.2% on a year-over-year basis, due to a weaker contribution from the Delaware Basin.
DVN’s Realized Prices
Realized oil prices (including cash settlements) for the quarter were $67.94 per barrel, down 1.7% from $69.15 in the year-ago period. Realized prices for natural gas liquids were $17.80 per barrel, down 18.8% from $21.93 in the prior-year quarter.
Realized gas prices were $1.68 per thousand cubic feet, indicating a decline of 32.3% from $2.48 a year ago.
Total oil equivalent realized prices, including cash settlements, were $38.94 per Boe, down nearly 8.3% year over year.
Highlights of DVN’s Q1 Release
Total production expenses in the first quarter were $894 million, down 19.7% year over year.
Devon Energy bought back $69 million worth of shares in the first quarter. Looking ahead, management has outlined plans to introduce a new share repurchase program exceeding $5 billion and to raise the quarterly fixed dividend, subject to board approval following the completion of the Coterra merger.
Devon Energy’s Merger Update
On Feb. 2, 2026, Devon Energy agreed to merge with Coterra Energy in an all-stock deal, creating one of the world’s largest shale operators with a strong foothold in the core of the Delaware Basin. The combined company, which will retain the Devon Energy name, is expected to drive significant shareholder value through greater scale, improved margins, higher free cash flow and about $1 billion in annual pre-tax synergies by the end of 2027.
The merger received shareholder approval on May 4 and is expected to close around May 7, 2026. After completion, Devon Energy’s shareholders will hold roughly 54% of the combined entity, while Coterra/’s shareholders will own about 46% on a fully diluted basis.
Financial Highlights of DVN
As of March 31, 2026, the company had cash and cash equivalents (including restricted cash) of $1.81 billion compared with $1.43 billion as of Dec. 31, 2025.
Long-term debt amounted to $7.387 billion as of March 31, 2026, down from $7.391 billion as of Dec. 31, 2025.
Devon Energy’s net cash from operating activities was $1.65 billion in first-quarter 2026 compared with $1.94 billion in first-quarter 2025. Capital expenditures in first-quarter totaled $839 million, down $934 million invested in first-quarter 2025.
Devon Energy’s Guidance
Second-quarter production is expected in the range of 851,000-868,000 Boe/d and capital spending is estimated in the band of $875-$925 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -12.84% due to these changes.
VGM Scores
Currently, Devon Energy has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Devon Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
