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Could Devon Energy Beat 4Q16 Earnings Estimates?

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Earnings per share estimates

Devon Energy (DVN) is set to report its 4Q16 and fiscal 2016 earnings on February 14, 2017, after the market closes. For 4Q16, excluding any one-time items, the consensus EPS (earnings per share) estimate for Devon Energy is $0.21, based on the net income estimate of ~$107 million. Devon Energy is expected to report ~66% lower profits than it did in 4Q15. DVN reported adjusted EPS of $0.77 in 4Q15.

However, on a sequential basis, excluding one-time items, Devon’s 4Q16 consensus net income estimate is higher and expected to increase its profits by ~128%.

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Devon’s net income in 3Q16

In 3Q16, Devon Energy’s EPS fell ~88% to $0.09, from $0.76 in 3Q15. Year-over-year lower revenue impacted Devon’s net income in 3Q16. We’ll study its revenue in the next part.

Devon’s 3Q16 adjusted net income excludes the one-time gain of ~$946 million, the majority of which was related to gains on asset sales, a deferred tax asset valuation allowance, and asset impairments. In 3Q16, Devon’s GAAP (generally accepted accounting principles) net income rose to $993 million, or $1.89 per share, from -$3.5 billion, or -$8.64 per share, in 3Q15.

Peers Marathon Oil (MRO), Diamondback Energy (FANG), and EOG Resources (EOG) reported net income of approximately -$97 million (-$0.23 per share), -$2.2 million (-$0.03 per share), and -$190 million (-$0.35 per share), respectively, in 3Q16.

Fiscal 2016 EPS estimates

For fiscal 2016, excluding any one-time items, Wall Street analysts expect Devon Energy to report adjusted net income of approximately -$67 million, or -$0.13 a share, compared with ~$1.0 billion, or $2.52 a share, in 2015. In the next part, we’ll take a look at Devon’s revenue estimates.

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