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Will Devon Energy Report Higher Profits in 3Q17?

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Devon Energy’s net income estimates

Devon Energy (DVN) is set to report its 3Q17 earnings on October 31 after the markets close. For 3Q17, excluding any one-time items, the current consensus net income estimate is at ~$206 million. On a year-over-year basis, DVN is expected to report ~338% higher profits compared to its 3Q16 adjusted net income of ~$47 million. On a sequential basis and excluding any one-time items, DVN’s 3Q17 consensus net income estimate is higher than a profit of ~$177 million in 2Q17.

Thus, based on the current consensus net income estimate, DVN is expected to report its sixth consecutive profit. Next, we’ll look at DVN’s 3Q17 EPS estimates below. Just like DVN, Southwestern Energy (SWN) is expecting a higher profit of ~$47 million in 3Q17 from a profit of ~$12 million in 3Q16.

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DVN’s EPS estimates

For 3Q17, excluding any one-time items, Wall Street analysts’ current consensus EPS estimate for DVN is at $0.38. On a year-over-year basis, Devon Energy’s 3Q17 current consensus EPS estimate is $0.29 higher compared with 3Q16 adjusted EPS of $0.09. Sequentially, DVN’s 3Q17 current consensus EPS estimate is higher than $0.34 in 2Q17.

Reviewing Devon Energy’s 2Q17 earnings performance

In most recent earnings releases in August 2017, Devon Energy reported better-than-expected profits of ~$177 million in 2Q17. Wall Street analysts were expecting a profit of ~$167 million. On a year-over-year basis, Devon Energy increased its profit by more than 436% compared with a profit of only ~$33 million in 2Q16. However, on a sequential basis and excluding any one-time items, DVN’s profit fell ~18% compared with a profit of ~$217 million in 1Q17.

DVN’s peers ConocoPhillips (COP) and Southwestern Energy (SWN), which are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), reported adjusted net incomes of ~$178 million and ~$40 million, respectively, in 2Q17.

In this series…

Having analyzed DVN’s 3Q17 earnings expectations, in this series, we’ll also look at DVN’s revenues expectations, production guidance, cash flow estimates, and odds of beating EPS expectations.

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