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How Devon Energy’s Stock Price Reacted to Past Earnings Beats

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Aug. 8 2016, Updated 11:04 a.m. ET

Devon Energy’s stock price action following 2Q16 earnings

Devon Energy (DVN) announced its 2Q16 earnings on August 2, 2016, after the markets closed. On the day of the earnings, Devon Energy’s stock price increased by 0.58% to close at $36.12. In after-hours price action, Devon Energy’s stock price traded as high as $36.93 before trading closed.

In the last three months leading into the earnings, Devon Energy’s stock price has increased by ~5% despite the ~12% decrease in crude oil (USO) (UWTI) (DWTI) prices during the same period.

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Devon Energy’s stock price trend change

After losing ~77% of its market capitalization between June 2014 to February 2016, Devon Energy’s (DVN) stock price is finally showing signs of a new uptrend. In April 2016, Devon Energy’s stock crossed the 200-day moving average for the first time in the last one year and is currently trading ~12% above it. Since February 2016, the stock’s bottom price is up by a whopping ~102%.

DVN’s 2016 relative performance

For 2016, DVN is outperforming bigger upstream companies from the S&P 500 (SPY). For 2016, DVN is up by ~14%, whereas bigger oil and gas producers like Marathon Oil (MRO), Occidental Petroleum (OXY), and EOG Resources (EOG) are up by ~4%, ~10%, and ~13%, respectively.

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DVN’s stock price behavior after past earnings beats

In the last six quarters, Devon Energy beat the earnings expectations in 1Q16, 4Q15, 3Q15, and 2Q15. Devon Energy reported its 1Q16 earnings after the market close on May 3, 2016. In 1Q16, excluding the one-time items, Devon Energy (DVN) reported a loss of $0.53 per share, $0.10 better than the consensus for a loss of $0.63 per share. Despite better-than-expected earnings, Devon Energy’s stock price fell by ~10% in the four sessions following the earnings release.

DVN reported its 4Q15 earnings after the markets closed on February 16, 2015. In 4Q15, excluding the one-time items, DVN reported a profit of $0.77 per share, $0.06 better than the consensus of $0.71 per share. Following the earnings release, better-than-expected earnings saw Devon Energy’s stock price fall by ~14% in three sessions.

A contrarian reaction also occurred after 2Q15 earnings when Devon Energy’s stock price fell by ~25% in three weeks, even after beating the consensus earnings estimates by $0.35 per share.

DVN’s 3Q15 post-earnings reaction was positive with a ~6% increase in five sessions after beating the consensus earnings estimates by $0.24 per share. However, considering the magnitude of the beat, the reaction was muted.

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