Devon Energy Corporation (DVN) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $993 million, or $ 1.89 a share in the quarter, against a net loss of $3,507 million, or $8.64 a share in the last year period.
Revenue during the quarter grew 17.55 percent to $4,233 million from $3,601 million in the previous year period. Gross margin for the quarter expanded 1627 basis points over the previous year period to 56.65 percent.
Operating income for the quarter was $1,465 million, compared with an operating loss of $5,444 million in the previous year period.
"Devon delivered an outstanding operational performance in the third quarter," said Dave Hager, president and chief executive officer. "Our development programs generated the best quarterly drill-bit results in Devon’s 45 year history. These prolific well results were centered in the STACK play, where production increased by 38 percent. We also continued to achieve significant cost savings in the quarter and we are on pace to reduce operating and G&A expenses by $1 billion in 2016."
Updated 2016 Outlook
Detailed forward-looking guidance for the fourth quarter of 2016 is provided later in the release. Based on year-to-date results and Devon’s fourth-quarter outlook, most operating and financial metrics remain relatively unchanged compared to previous guidance disclosures. Of note, in the fourth quarter, the company expects to increase its rig activity in the U.S. from five operated rigs running in the third quarter to as many as 10 operated rigs by year end. This activity is expected to result in approximately $400 million to $425 million of E&P capital expenditures in the fourth quarter.
Operating cash flow drops significantlyDevon Energy Corporation has generated cash of $1,210 million from operating activities during the nine month period, down 71.87 percent or $3,092 million, when compared with the last year period. The company has spent $1,404 million cash to meet investing activities during the nine month period as against cash outgo of $4,732 million in the last year period.
Cash flow from financing activities was $264 million for the nine month period, down 67.08 percent or $538 million, when compared with the last year period.
Cash and cash equivalents stood at $2,385 million as on Sep. 30, 2016, up 33.46 percent or $598 million from $1,787 million on Sep. 30, 2015.
Working capital increases sharply
Devon Energy Corporation has recorded an increase in the working capital over the last year. It stood at $1,600 million as at Sep. 30, 2016, up 100.75 percent or $803 million from $797 million on Sep. 30, 2015. Current ratio was at 1.56 as on Sep. 30, 2016, up from 1.23 on Sep. 30, 2015.
Days sales outstanding went down to 29 days for the quarter compared with 38 days for the same period last year.
At the same time, days payable outstanding went up to 88 days for the quarter from 87 for the same period last year.
Debt comes down marginallyDevon Energy Corporation has recorded a decline in total debt over the last one year. It stood at $11,354 million as on Sep. 30, 2016, down 4.59 percent or $546 million from $11,900 million on Sep. 30, 2015. Total debt was 42.35 percent of total assets as on Sep. 30, 2016, compared with 34.64 percent on Sep. 30, 2015. Debt to equity ratio was at 1.13 as on Sep. 30, 2016, up from 0.75 as on Sep. 30, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
