Devon Energy tops Q3 profit estimates, misses on revenue

Devon Energy (DVN) posted third-quarter 2026 core earnings of $1.42 per share, topping the $1.34 consensus, while revenue of $6.86 billion fell short of the $7.04 billion estimate.

Shares fell 1.5% at 3:59 p.m. ET, from a $42.88 close.

Core earnings were $1.63 billion.

Here's how the company did:

• Core earnings per share: $1.42, vs. $1.34 expected
• Revenue: $6.86 billion vs. $7.04 billion expected
• Diluted EPS (GAAP): 88 cents vs. $1.09 a year earlier
• Net earnings: $1.01 billion vs. $687 million a year earlier
• Operating cash flow: $2.81 billion vs. $1.69 billion a year earlier

Production averaged 1,668,000 barrels of oil equivalent (Boe) per day, within guidance. Oil output was 553,000 barrels per day, and the realized oil price including hedges was $79.54 per barrel.

Operating cash flow was $2.8 billion and adjusted free cash flow $2.0 billion, the first full quarter of combined operations.

Guidance and 2027 outlook

Devon reaffirmed full-year 2026 production and capital guidance, with Eagle Ford included through closing.

For the fourth quarter, total production is expected to average 1,660,000 to 1,700,000 Boe per day, and capital spending is expected to be $1.29 billion to $1.40 billion.

Pro forma for the Eagle Ford sale, 2027 oil production is about 525,000 barrels per day, total production about 1,600,000 Boe per day and total capital about $5.3 billion. Full 2027 guidance comes in February with fourth-quarter results.

Eagle Ford sale and synergies

Devon will sell its Eagle Ford assets for $4.2 billion in cash, subject to customary closing adjustments, with closing expected in early 2027 pending regulatory approvals.

After taxes and effective-date adjustments, net proceeds are expected to be about $3.5 billion. The company plans to use them to accelerate share repurchases and reduce debt.

Devon now expects to exit 2026 at an annualized pre-tax synergy run rate of about $350 million, 75% above the $200 million exit rate outlined in August.

Average synergies in 2027 are now expected at about $700 million, up from $600 million. The company continues to expect at least $1.0 billion of annual pre-tax run-rate synergies by year-end 2027.

Capital returns and debt

Devon returned $1.53 billion to shareholders in the quarter, through $366 million in dividends, $414 million of share repurchases and the retirement of the remaining $750 million term loan.

The board declared a fixed fourth-quarter dividend of 32 cents per share, payable Dec. 30, 2026, to holders of record Dec. 15.

Devon repurchased 8.9 million shares. It has $7.4 billion left on its $8.0 billion authorization, which runs through mid-2029, and expects repurchases to exceed $1 billion in the fourth quarter.

Total debt was $10.6 billion at quarter end and net debt was $10.2 billion, or 0.9 times trailing twelve-month EBITDAX. The company plans to retire another $1.5 billion of long-term debt, reaching its $9 billion gross debt target in early 2027.