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Devon Energy Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for profit of 82 cents per share, a decline of 52% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $1.46. Between one and three months ago, the average estimate moved down. It also has dropped from $1.02 during the last month. For the year, analysts are projecting net income of $4.05 per share, a decline of 34% from last year.
Past Earnings Performance: Last quarter, the company missed estimates by 39 cents, coming in at profit of $1.05 per share versus a mean estimate of net income of $1.44 per share. In the fourth quarter of the last fiscal year, the company beat estimates by 7 cents.
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Wall St. Revenue Expectations: Analysts are projecting a decline of 26.1% in revenue from the year-earlier quarter to $2.38 billion.
Stock Price Performance: Between May 1, 2012 and July 30, 2012, the stock price fell $10.64 (-15.23%), from $69.85 to $59.21. The stock price saw one of its best stretches over the last year between April 20, 2012 and May 1, 2012, when shares rose for eight straight days, increasing 8.3% (+$5.42) 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.
A Look Back: In the first quarter, profit fell 5.5% to $393 million (97 cents a share) from $416 million (97 cents a share) the year earlier, missing analyst expectations. Revenue rose 16.3% to $2.5 billion from $2.15 billion.
With double-digit revenue growth the past four quarters, this earnings release is a chance to keep that positive trend going. The company has averaged year-over-year revenue growth of 34.5% over the last four quarters.
An income boost this time around would be welcome news after profit drops in the past three quarters. Net income fell 50.3% in the third quarter of the last fiscal year, by 9.8% in the fourth quarter of the last fiscal year and again in the first quarter.
Analyst Ratings: There are 12 out of 20 analysts surveyed (60%) rating Devon Energy a buy.
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.45 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.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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