Devon Energy Corp. swung to a third-quarter loss on a large asset-impairment charge as the independent oil and gas producer posted a steeper-than-expected revenue decline.
Devon has seen its bottom line weaken in recent quarters on hedging losses. And like a number of energy producers, the company has turned its attention to oil as natural-gas prices remain weak. Last month, Devon unveiled plans to consolidate its U.S. exploration and production operations group at its Oklahoma City headquarters by the end of the first quarter, resulting in the closing of its Houston office.
The company also agreed in August to sell 30% of its interest in about 650,000 net acres in the oil-rich Cline and Midland-Wolfcamp Shales in West Texas to Japan's Sumitomo Corp. in a deal valued at about $1.4 billion.
Devon Energy reported a loss of $719 million, or $1.80 a share, compared with a profit of $1.04 billion, or $2.50 a share, a year earlier. Excluding a $1.1 billion asset-impairment charge, oil and gas derivatives and other items, adjusted per-share earnings were 88 cents in the most-recent quarter.
Revenue dropped 47% to $1.87 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of 69 cents on revenue of $2.27 billion.
Operating margin swung to negative 62.3% from positive 43.9%.
Average daily production of oil equivalent rose 2.6%. Averaged realized prices, excluding hedging effects, dropped 20%.
Copyright (c) 2012 Dow Jones & Company, Inc.
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