DOW JONES NEWSWIRES
Devon Energy Corp.'s (DVN) second-quarter earnings plunged 76%
on lower commodity prices and because of the comparison with a
year-ago gain from discontinued operations, but results widely beat
expectations.
The oil and gas independent - it produces oil and gas but
doesn't refine products - has built its business through
unconventional natural gas sources, such as shale. Commodity
prices, which have been volatile recently, are nonetheless down
sharply from their record highs a year ago. This has hit the
industry hard and forced some companies to cut spending and
production.
Devon posted income of $314 million, or 70 cents a share, down
from $1.3 billion, or $2.88 a share, a year earlier. The results
included 4 cents a share this year and $1.57 a share last year,
respectively, in earnings from discontinued operations. Excluding
items including hedging losses and severance costs, the latest
quarter's earnings were 85 cents.
Revenue decreased 41% to $2.09 billion.
Analysts polled by Thomson Reuters expected earnings of 59 cents
and revenue of $1.92 billion.
The company does most of its business in North America. Devon
shed its West African properties in 2007 and 2008, but it still has
assets in China, Brazil and Azerbaijan.
Production from continuing operations rose 12% to 719,000
barrels of oil equivalent a day, which the company said was a
record. Total natural gas production rose 11% as realized prices,
excluding hedging effects, plunged 70%. Oil production grew 17% as
prices dropped 53%.
Devon's shares closed Tuesday at $61.23 and haven't traded
premarket.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com
