uploads///DVN Q Post EPS

Devon Energy’s Profit Fell 59% in 4Q16


Feb. 17 2017, Published 4:48 p.m. ET

Net income

Devon Energy (DVN) announced its 4Q16 earnings on February 14, 2017, after markets closed. Devon Energy reported a better-than-expected profit of ~$131 million. Wall Street analysts were expecting profits of ~$108 million. On a year-over-year basis, DVN’s 4Q16 profit fell ~59% compared to a profit of ~$319 million in 4Q15. However, on a sequential basis, and excluding any one-time items, DVN’s 4Q16 profit rose ~178% from a profit of ~$47 million in 3Q16.

For full-year 2016, DVN reported lower adjusted net income of ~-$38 million, or -$0.13 a share, from ~$1.04 billion, or $2.52 a share, in 2015.

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For 4Q16, DVN reported adjusted revenues of ~$2.8 billion, ~3% better than Wall Street analyst consensus for revenues of ~$2.7 billion. DVN’s revenues beat can be attributed to the better-than-expected production (USO) (UNG) in 4Q16. We’ll study DVN’s production in the next part of this series.

DVN’s 4Q16 revenues are lower by ~3% when compared with 4Q15 revenues of ~$2.9 billion. Even when compared sequentially with 3Q16, DVN’s 4Q16 revenues are lower by ~3%.

For the full-year 2016, Devon Energy reported revenues of ~$10.3 billion, ~22% lower from ~$13.2 billion in 2015. DVN’s peer ConocoPhillips (COP), which also has operations in the Permian Basin, reported full-year 2016 revenues of ~$24.4 billion, ~21% lower than ~$30.9 billion in 2015.

In this series

Having analyzed Devon Energy’s 4Q16 net income and revenue performance, we’ll also look at Devon Energy’s production performance, cash flows, Wall Street analyst ratings, and DVN’s price forecast using implied volatility.


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