(RTTNews) - Independent oil and gas company Devon Energy Corp. (DVN: News ) reported Wednesday a profit for the third quarter that plunged from last year, hurt by significantly lower product prices as well as a 64% drop in quarterly revenues, despite strong production growth and lower overall costs. The company noted that costs across all expense categories decline from the year-ago quarter.

With the economic crisis curtailing demand for oil, companies operating in the oil sector have had a tough time. Lower commodity prices and a decline in margins have hurt the bottom line of many of them. Oil prices have almost halved from an all-time high of $147 per barrel in July 2008, although they have improved from a yearly low of less than $34 a barrel in February this year.

Third Quarter Results

The Oklahoma City, Oklahoma-based company reported net income of $499 million or $1.12 per share for the third quarter, sharply lower than $2.62 billion or $5.88 per share in the prior-year quarter.

The year-ago quarter had earnings from discontinued operations of $109 million or $0.25 per share. Income from continuing operations for the quarter plunged to $499 million, or $1.12 per share from $2.51 billion, or $5.64 per share in the year-ago quarter.

Excluding items, Devon reported earnings for the latest quarter of $491 million, or $1.10 per share. On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.90 per share. Analysts' estimates typically exclude special items.
Total revenues for the quarter plunged to $2.10 billion from $5.98 billion in the same quarter last year, but topped nine Wall Street analysts' consensus estimate of $1.84 billion.

Oil sales for the quarter fell to $845 million from $1.30 billion in the same quarter last year. Gas sales were $691 million, sharply down from $2.11 billion a year ago. Sales of natural gas liquids declined to $195 million from $362 million in the prior-year quarter.

Revenues from oil, gas and natural gas liquids sales dropped 54% to $1.7 billion from the year-ago quarter, as significantly lower product prices more than offset the growth in natural gas and liquids production.

Among Devon's peers, ConocoPhillips (COP: News ) reported last week a sharp year-over-year decline in profit for the third quarter of fiscal 2009, hurt by lower crude oil and natural gas prices as well as lower refining margins. Net income declined to $1.50 billion or $1.00 per share from $5.19 billion or $3.39 per share last year. Quarterly revenues and other income dropped to $41.31 billion from $71.37 billion in the prior-year quarter.

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