Devon Energy’s 2Q17 earnings
Devon Energy announced its 2Q17 earnings on August 1, 2017, after the market closed. In 2Q17, Devon Energy reported revenues of ~$3.15 billion—lower than Wall Street analysts’ consensus for revenues of ~$3.25 billion. However, Devon Energy beat the EPS estimates by $0.02 in 2Q17. It reported an adjusted profit of $0.34 per share. Wall Street analysts’ consensus was for profit of $0.32 per share.
Devon Energy’s 2Q17 EPS (earnings per share) is $0.28 higher compared to its profit of $0.06 per share in 2Q16. However, compared sequentially with 1Q17, Devon Energy’s 2Q17 EPS is lower by $0.07 per share.
2Q16 post earnings price action
Devon Energy announced its 2Q16 earnings after the market closed on August 2, 2016. In 2Q16, excluding the one-time items, Devon Energy beat consensus EPS estimate by a wide margin of $0.25. Following the earnings release, better-than-expected earnings saw Devon Energy’s stock price rise ~25% in three weeks.
Year-to-date, Devon Energy has fallen ~28% in 2017. The Energy Select Sector SPDR ETF (XLE) is grossly underperforming the S&P 500 ETF (SPY) in 2017. SPY has risen ~12%, while XLE has fallen ~10%. Devon Energy’s peers Marathon Oil (MRO) and Occidental Petroleum (OXY) have fallen ~31% and ~12%, respectively, in 2017. Just like Devon Energy, Occidental Petroleum has operations in the Permian Basin.
XLE generally invests at least 95% of its total assets in oil and gas companies. According to the SPDR S&P 500 ETF Trust prospectus, “The Trust seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of the S&P 500® Index.”
In the next part, we’ll look at Devon Energy’s implied volatility.