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Devon Energy's Third Quarter Earnings Report
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DVN
Devon Energy (NYSE:DVN) announced its results for the most recent quarter on November 7, 2012. Devon Energy explores, develops and transports oil, gas, and NGLs.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: How To Decode A Company's Earnings Reports
The Numbers: Both EPS and revenues failed to meet expectations as Devon Energy posted $1.80 per share and revenues of $1.86 billion. Analysts were expecting 68 cents per share and revenues of $2.58 billion. Revenue fell 46.7%, while EPS is down from the year-ago quarter's $2.50 per share. Revenue declined last quarter after shrinking 20.5% to $2.56 billion in the second quarter. Devon Energy reported a net loss of $719 million during the third quarter. The company's loss in the latest quarter comes after the company reported profits in the three prior quarters.
Management Quote: "Devon's capital program has delivered strong results this year with aggressive drilling programs in oil-focused basins," said John Richels, president and chief executive officer. "As we have pursued higher-returning oil projects, we also have de-emphasized natural gas drilling, limiting overall production growth. This is exactly the right tactical decision for Devon in this environment and is consistent with our longstanding strategy to optimize returns as opposed to top-line production growth."
Looking Ahead: Over the past 90 days, the average estimate for the fourth quarter has fallen from 99 cents per share to 83 cents, indicating that analysts are growing pessisimistic about the company's performance next quarter. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved down from $3.53 a share to $3.14 over the last 90 days.
In most situations, when earnings do not meet analyst estimates, a business' stock price will tend to drop. On the other hand, when actual earnings beat estimates by a significant amount, the share price will likely surge. SEE: How To Decode A Company's Earnings Reports
The Numbers: Both EPS and revenues failed to meet expectations as Devon Energy posted $1.80 per share and revenues of $1.86 billion. Analysts were expecting 68 cents per share and revenues of $2.58 billion. Revenue fell 46.7%, while EPS is down from the year-ago quarter's $2.50 per share. Revenue declined last quarter after shrinking 20.5% to $2.56 billion in the second quarter. Devon Energy reported a net loss of $719 million during the third quarter. The company's loss in the latest quarter comes after the company reported profits in the three prior quarters.
Looking Ahead: Over the past 90 days, the average estimate for the fourth quarter has fallen from 99 cents per share to 83 cents, indicating that analysts are growing pessisimistic about the company's performance next quarter. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved down from $3.53 a share to $3.14 over the last 90 days.
by
Investopedia Staff
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