Devon Energy Corporation : Devon Energy 1Q Net Falls 5.5% On Wide Canadian Oil Price Differentials
05/02/2012| 08:31am US/Eastern
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Devon Energy Corp.'s (DVN) first-quarter earnings fell 5.5% as unusually wide Canadian oil price differentials contributed to the independent oil and gas producer's slower-than-expected revenue growth.
The company said Canadian oil differentials began to normalize after the end of the quarter.
Devon has seen its profit decline in recent quarters on hedging losses. Meanwhile, the company has turned its attention to oil as natural-gas prices remain weak. Devon has shed about $10 billion in offshore and international oil and gas fields since late 2009 to focus on North American onshore production. The company has also said it will grow its oil production by 20% in 2012.
Devon Energy reported a profit of $393 million, down from $416 million a year earlier. On per-share basis, earnings were flat at 97 cents, due to fewer shares outstanding in the most recent quarter. Excluding items such as oil and gas derivatives and asset sales, earnings were $1.05 a share in the latest quarter. Revenue jumped 16% to $2.5 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of $1.43 a share on revenue of $2.55 billion.
Operating margin fell to 24.5% from 27%, reflecting rising oilfield service and supply costs.
Average daily production of oil equivalent rose 10%. Averaged realized oil prices, excluding hedging effects, jumped 7.9%.
Shares closed Tuesday at $70.65 and were inactive premarket. The stock has risen 11% over the past three months.
--By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com
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