Energy investors need to keep the coffee flowing today as earnings season shifts into high gear. Devon Energy Corp. (NYSE:DVN) is one of three top oil companies reporting earnings after the closing bell tonight. The good news is that Devon didn't disappoint investors, as it beat estimates and raised full-year guidance. Let's take a closer look at the quarter.

Drilling down into the numbers
Devon Energy reported earnings of $1 billion, or $2.48 per share. However, on an adjusted basis, earnings were $552 million, or $1.34 per share. That's 4% higher than the third quarter of last year and $0.11 higher than analysts were expecting. Earnings, however, masked the company's even stronger cash flow, which came in at $1.6 billion.

The company's strong financial results were fueled by high-margin oil production. Overall, Devon Energy produced 640,000 barrels of oil equivalent per day, or BOE/d, in the third quarter. That was 19% higher than last year's third quarter and exceeded the company's guidance range. Even better, oil production was up 44% over the prior year to set a new record.

Devon Energy saw really strong growth at its U.S. oil assets. Leading the way in the U.S. was the Eagle Ford Shale, where total production is now up 76% since the company acquired the properties in March. Meanwhile, the company's position in the Permian Basin also delivered strong production growth, as total production is up 20% in the past year.

However, the U.S. isn't the only place where Devon Energy is enjoying oil-fueled success. The company's Canadian oil sands operations had reason to celebrate as the company achieved first oil at its Jackfish 3 project in the quarter. This start-up begins a new era for the Jackfish complex, as Devon Energy is now shifting into harvest mode and should begin to generate up to $1 billion per year of free cash flow from the asset, with the heavy capital spending now over.

A look at the outlook
Devon Energy's strong third-quarter results are expected to continue as the company is bumping up its guidance for the full year. Devon Energy is now raising the midpoint of its production guidance by 3%, without increasing capital spending.

The company is also taking measures to protect its future cash flows during the current slump in oil prices. It has now hedged 60% of its oil production for next quarter, along with 80% of its natural gas production. In addition, it has 50% of 2015 oil production and 30% of gas production hedged. Devon Energy will this be enabled to better weather the current storm in oil prices, as it will preserve the cash flow it needs to continue to grow its higher-margin oil production.

Investor takeaway
Devon Energy delivered a much stronger quarter than analysts were expecting. The company's record oil production was more than enough to offset the weakness in oil prices. Looking ahead, Devon Energy expects its strong results to continue, as it is well hedged and has one of the strongest balance sheets in the energy sector to weather any storm in energy oil prices.