The 10-second takeaway
For the quarter ended March 31 (Q1), Devon Energy whiffed on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted significantly. Non-GAAP earnings per share dropped significantly. GAAP earnings per share contracted to a loss.
Margins dropped across the board.
Devon Energy booked revenue of $1.97 billion. The four analysts polled by S&P Capital IQ wanted to see net sales of $2.40 billion on the same basis. GAAP reported sales were 16% lower than the prior-year quarter's $2.35 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.66. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.56 per share. Non-GAAP EPS of $0.66 for Q1 were 37% lower than the prior-year quarter's $1.05 per share. (The prior-year quarter included -$0.05 per share in earnings from discontinued operations.) GAAP EPS were -$3.34 for Q1 versus $0.97 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 55.0%, 930 basis points worse than the prior-year quarter. Operating margin was 5.9%, much worse than the prior-year quarter. Net margin was -67.9%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $2.62 billion. On the bottom line, the average EPS estimate is $0.80.
Next year's average estimate for revenue is $10.82 billion. The average EPS estimate is $3.60.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 2,166 members out of 2,228 rating the stock outperform, and 62 members rating it underperform. Among 468 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 459 give Devon Energy a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Devon Energy is outperform, with an average price target of $71.02.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Devon Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.