Devon Energy Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Devon Energy (NYSE:DVN) will unveil its latest earnings on Wednesday, November 7, 2012. Devon Energy explores, develops and transports oil, gas, and NGLs.

Devon Energy Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 67 cents per share, a decline of 56.5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 81 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 71 cents during the last month. Analysts are projecting profit to rise by 49% compared to last year’s $3.13.

Past Earnings Performance: The company has missed estimates in the last two quarters. In the second quarter, it missed the mark by 26 cents as a result of reporting profit of 55 cents against an estimate of net income of 81 cents per share. In the first quarter, the company fell short of forecasts by 39 cents.

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A Look Back: In the second quarter, profit fell 82.6% to $477 million ($1.18 a share) from $2.74 billion ($6.48 a share) the year earlier, missing analyst expectations. Revenue fell 20.5% to $2.56 billion from $3.22 billion.

Wall St. Revenue Expectations: Analysts are projecting a decline of 21.3% in revenue from the year-earlier quarter to $2.25 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.86 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 48.8% in the third quarter of the last fiscal year, 28.7% in the fourth quarter of the last fiscal year and 16.3%in the first quarter before dropping in the second quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 37.1% over the past four quarters.

Stock Price Performance: Between October 4, 2012 and November 1, 2012, the stock price dropped $2.30 (-3.8%), from $60.82 to $58.52. The stock price saw one of its best stretches over the last year between September 5, 2012 and September 14, 2012, when shares rose for eight straight days, increasing 11.4% (+$6.48) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight straight days, dropping 12.5% (-$8.39) over that span.

Analyst Ratings: There are 13 out of 21 analysts surveyed (61.9%) rating Devon Energy a buy. Over the past 90 days, the average rating for the stock has moved up from hold to moderate buy.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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