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Home Energy Devon Energy shares drop 12% on disappointing earnings

Devon Energy shares drop 12% on disappointing earnings


DENVER, Feb 15 (Reuters) – Shares of U.S. shale oil producer Devon Energy (DVN.N) fell more than 12% at midday Wednesday after the company reported fourth quarter earnings that missed analysts’ forecast on higher-than-expected expenses and lower production.

The current quarter’s production will be 10,000 barrels of oil and gas per day (boepd) lower than expected, it warned, in part due to a fire a key gas compression station in Texas in late January. Shares were down $7.92 at $56.01 apiece.

The fire-hit gas compression facility will resume operations at the end of the first quarter, executives said during an earnings call on Wednesday.

Wall Street analysts had a negative view of the results, pointing to higher capital spending, lower production and a profit miss.

“Disappointing print on Q4,” wrote analysts for Tudor, Pickering, Holt & Co, pointing to capital expenditures, which at $3.7 billion is 5% above expectations, as well as lower earnings and free cash flow.

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“2023 outlook disappoints what had already been tempered expectations,” they added.

The higher spending comes as Devon is temporarily adding a fourth hydraulic fracturing crew this quarter to make up for output losses due to third party outages.

The company posted adjusted earnings of $1.66 per share for the fourth-quarter versus analysts’ expectations of $1.75 a share, according to Refinitiv data. read more

Reporting by Liz Hampton in Denver

Our Standards: The Thomson Reuters Trust Principles.

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