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Devon's (DVN) Q1 Earnings to be Hit by Downtime in Delaware

Devon Energy Corporation DVN is set to report first-quarter 2023 results on May 8, after market close. This oil and gas company delivered a negative earnings surprise of 5.14% in the last reported quarter.

Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Factors at Play

Devon Energy’s domestic focus and multi-basin, high-quality assets are likely to have strong production volumes in first-quarter. The ongoing share repurchase program and reduction in shares outstanding are likely to be accretive to its first-quarter earnings.

However, the correction in commodity prices might have impacted the first-quarter earnings. In addition to fewer wells coming online, infrastructure outages in the Delaware Basin are expected to cut total production volumes by 10,000 barrels of oil equivalent per day (Boe/d) during the first quarter. Ethane rejection also impacted first-quarter production volumes.

Expectations

The Zacks Consensus Estimate for first-quarter oil production is pegged at 318,000 barrels per day. The Zacks Consensus Estimate for fourth-quarter natural gas liquid (NGL) production is pegged at 147,000 barrels per day.

Devon Energy expects total production for the first quarter to be in the range of 625,000 to 645,000 Boe/d, including 315,000 to 321,000 barrels of oil per day.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Devon Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.

Devon Energy Corporation Price and EPS Surprise

Devon Energy Corporation Price and EPS Surprise
Devon Energy Corporation Price and EPS Surprise

Devon Energy Corporation price-eps-surprise | Devon Energy Corporation Quote

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Earnings ESP: Devon Energy has an Earnings ESP of -0.93%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Devon Energy currently carries a Zacks Rank #3.

Stocks to Consider

Investors can also consider the following players from the same sector that have the right combination of elements to beat on earnings in this reporting cycle.

EOG Resources Inc. EOG is likely to deliver an earnings surprise when it reports first-quarter earnings on May 5, 2023. EOG has an Earnings ESP of +0.74% and currently has a Zacks Rank #3.

Long-term (three- to five-year) earnings growth of EOG Resources is currently 28.65%. The Zacks Consensus Estimate for 2023 earnings of EOG Resources imply year-over-year decline of 14.5%.

Permian Resources Corporation PR is likely to deliver an earnings surprise when it posts first-quarter earnings on May 8, 2023. PR has an Earnings ESP of +2.33%.

PR currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Permian Resources reported an average earnings surprise of 6.1% in the last four quarters. The Zacks Consensus Estimate for P’s 2023 earnings imply year-over-year growth of 29.6%.

Occidental Petroleum OXY is likely to announce an earnings surprise when it reports first-quarter earnings on May 9, 2023. OXY has an Earnings ESP of +0.09% and has a Zacks Rank #3.

Occidental’s long-term earnings growth is 21.99%. The Zacks Consensus Estimate for OXY ‘s earnings of 2023 imply year-over-year decline of 37.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Devon Energy Corporation (DVN) : Free Stock Analysis Report

Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report

EOG Resources, Inc. (EOG) : Free Stock Analysis Report

Permian Resources Corporation (PR) : Free Stock Analysis Report

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Zacks Investment Research