Devon Energy 4Q profit falls 10 pct

OKLAHOMA CITY (AP) -- Devon Energy Corp. said Wednesday that its profit fell 9.8 percent in the fourth quarter as natural gas prices fell.

The results beat Wall Street estimates, however, and its shares rose almost 7 percent in afternoon trading. The company also announced it is boosting its quarterly dividend 18 percent.

The Oklahoma City energy company has been working to produce more crude oil, which rose in price last year and was more profitable to produce than natural gas. But its overall output was still dominated by natural gas.

In the final three months of 2011, Devon said its net income fell to $507 million, or $1.25 per share, compared with $562 million, or $1.29 per share, a year earlier. Revenue increased 21.1 percent to $2.59 billion from $2.14 billion a year earlier.

Excluding discontinued operations from asset sales, investments and other special items, Devon said it earned $1.55 per share. Analysts, who typically exclude special items, had expected earnings of $1.46 per share on revenue of $2.43 billion.

Devon said it increased production by 10 percent in the fourth quarter, but a majority of that production came from natural gas. The company sold natural gas for an average of $3.16 per 1,000 cubic feet in the fourth quarter, down 4.8 percent from the same period in 2010.

As of Dec. 31, 2011, Devon said it increased its proved reserves of oil by 3.5 percent and natural gas by 4.6 percent.

For the full year, Devon said its net income rose to $4.7 billion, or $11.25 per share. compared with $4.6 billion, or $10.31 per share, in 2010. Annual revenue increased 15.2 percent to $11.5 billion.

The company said it will boost its quarterly dividend to 20 cents per share from 17 cents per share. The increase will take effect for the dividend paid on March 30 to shareholders of record on March 15. The company said the increase reflects its confidence in its cash flow and underlying business going forward.

Shares rose $4.45, or 6.7 percent, to $71.35 in afternoon trading. Its shares are up 40 percent from their 52-week low of $50.74 set in early October. They traded as high as $93.56 in late March.