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Can Devon Energy Report Higher Profits in 2Q17?



Net income estimates

Devon Energy (DVN) is set to report its 2Q17 earnings on August 1, 2017, after the market closes. Excluding any one-time items, the current consensus net income estimate for the company in 2Q17 is ~$169.0 million. On a year-over-year basis, DVN is expected to report ~412.0% higher profits compared to its 2Q16 adjusted net income of ~$33.0 million. However, on a sequential basis and excluding any one-time items, its 2Q17 consensus net income estimate is lower than a profit of ~$217.0 million in 1Q17. DVN’s peer ConocoPhillips (COP) is expecting a higher profit of ~$39.0 million in 2Q17 from a loss of ~$985.0 million in 2Q16.

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EPS estimates

For 2Q17, excluding any one-time items, Wall Street analysts’ current consensus EPS (earnings per share) estimate for DVN is $0.32. On a year-over-year basis, the current 2Q17 consensus EPS estimate is $0.26 higher than its 2Q16 adjusted EPS of $0.06. Sequentially, the 2Q17 current consensus EPS estimate is $0.09 lower than $0.41 in 1Q17.

Devon Energy’s 1Q17 earnings performance

In its most recent earnings release in May 2017, Devon Energy reported a better-than-expected profit of ~$217.0 million for 1Q17. Wall Street analysts were expecting a profit of ~$210.0 million. On a year-over-year basis, DVN turned its losses into profits. In 1Q16, it reported a loss of $249.0 million. However, on a sequential basis and excluding any one-time items, it increased its profits by ~66.0% in 1Q17 from a profit of ~$131.0 million in 4Q16.

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DVN’s peers Southwestern Energy (SWN), Marathon Oil (MRO), and Encana (ECA) reported adjusted net incomes of $87.0 million, -$57.0 million, and $104.0 million, respectively, in 1Q17. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) generally invests at least 80.0% of its total assets in oil and gas exploration companies.

In this series

In addition to analyzing Devon Energy’s 2Q17 earnings expectations in this series, we’ll also look at its revenues expectations, production guidance, and cash flow estimates. We’ll see what the odds are for beating its EPS expectations and look at what Wall Street analysts are saying about the company ahead of its earnings.


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