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Devon 3Q profits drop; year-ago qtr had big gains

November 2, 2011

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OKLAHOMA CITY—Devon Energy Corp. said its third-quarter profit fell by half when compared with a quarter last year that was pumped up by a $1.5 billion asset sale.

The Oklahoma City oil and natural gas company reported earnings of $1.04 billion, or $2.50 per share, for the three-month period ended Sept. 30. That compares with $2.09 billion, or $4.79 per share, in the same part of 2010 when Devon sold assets in Azerbaijan for $1.5 billion. Revenue jumped 48.8 percent to $3.5 billion in the quarter.

Excluding unrealized gain on commodities investments, Devon said its adjusted profit was $638 million, or $1.54 per share, in the quarter. Analysts, who typically exclude special items like unrealized gains and losses, had expected earnings of $1.46 per share on sales of $2.45 billion, according to FactSet.

Devon said it boosted production in the quarter. Oil production rose 21 percent. Natural gas liquids production increased 13.4 percent, and natural gas production rose 3 percent.

The company sold oil for an average of $70.76 per barrel, up 13.6 percent from a year ago. It sold natural gas at an average of $4.16 per 1,000 cubic feet, down 10.9 percent from last year.