Devon Energy posts $719M 3Q loss on hefty charge
OKLAHOMA CITY (AP) — Devon Energy Corp., a major natural gas producer, said Wednesday it posted a $719 million third-quarter loss, pulled down by a $1.1 billion charge related to a drop in the value of its oil and gas assets.
But the company's adjusted profit managed to beat Wall Street predictions, though its revenue fell short. Devon shares dropped more than 6 percent in midday trading as the broader markets slid.
For the quarter ended Sept. 30, the Oklahoma City-based company's loss amounted to $1.80 per share and compared with a profit of $1.04 billion, or $2.50 per share, in the same quarter last year.
Devon said it was forced to take the $1.1 billion non-cash charge, because the steep drop in natural gas prices over the past year reduced the book value of its oil and gas properties. Excluding the impairment charge and other items, the company said it posted an adjusted profit of 88 cents per share for the recent quarter.
Revenue tumbled 47 percent to $1.87 billion from $3.5 billion, as natural gas production and prices both fell.
Analysts, on average, expected a profit of 69 cents per share on $2.16 billion in revenue, according to a FactSet poll.
Oil production rose 14 percent to 142,500 barrels per day, but natural gas production fell 2 percent to 2.55 billion cubic feet per day.
At the same time, Devon's average oil price rose 3 percent to $92.32 per barrel, while its average natural gas price dropped by a third to $2.80 per thousand cubic feet.
In midday trading, Devon shares fell $3.84, or 6.4 percent, to $55.78.