Devon Energy (DVN) to Post Q3 Earnings: What's in the Cards?

Devon Energy Corporation DVN is expected to report third-quarter 2018 results on Nov 6 after the market closes. In the last reported quarter, the company delivered a negative earnings surprise of 8.11%.

Let’s see how things are shaping up prior to the earnings announcement

Factors to Consider

Devon estimates total production from its assets for the third quarter to be 418,000 barrels of oil equivalent (Boe) per day, which will exceed the production guidance range of 398,000 to 417,000 Boe per day (adjusted for the non-core asset sales). Quarterly production benefited from higher natural gas liquids yields and recoveries. Domestic oil production was in line with expectations.

Third-quarter results are likely to gain from cost-reduction initiatives undertaken by the company. Devon’s upstream capital spending during the quarter was 9% below its mid-point guidance.

The expected improvement in the commodity prices is likely to positively impact the company’s results. The Zacks Consensus Estimate for total realized price, including cash settlements at the end of third-quarter 2018, is pegged at $31.66 per Boe, up 20.9% from the figure reported a year ago.

Devon Energy Corporation Price and EPS Surprise

Devon Energy Corporation Price and EPS Surprise | Devon Energy Corporation Quote

What Our Quantitative Model Predicts

Our proven model indicates that Devon is unlikely to beat estimates in the upcoming quarterly results. A stock needs to have both a positive Earnings ESP (which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate) and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass estimates, and Devon does not have the right mix.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP of the company is pegged at 0.00%. This is because the Most Accurate Estimate and the Zacks Consensus Estimate are both pegged at 43 cents.

Zacks Rank: Currently, Devon carries a Zacks Rank #2, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

Conversely, we caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies from the same industry that you may also want to consider as these have the right combination of elements to post an earnings beat:

Parsley Energy, Inc. PE is expected to release third-quarter results on Nov 1. It has an Earnings ESP of +2.27% and sports a Zacks Rank #1. You can the complete list of today’s Zacks #1 Rank stocks here.

Penn Virginia Corporation PVAC is scheduled to announce third-quarter results on Nov 14. It has an Earnings ESP of +6.38% and a Zacks Rank #2.
 
SM Energy Company SM is expected to release third-quarter results on Nov 1. It has an Earnings ESP of +10.08% and a Zacks Rank #2.

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SM Energy Company (SM) : Free Stock Analysis Report
 
Devon Energy Corporation (DVN) : Free Stock Analysis Report
 
Parsley Energy, Inc. (PE) : Free Stock Analysis Report
 
Penn Virginia Corporation (PVAC) : Free Stock Analysis Report
 
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