The chart below shows how CRC performed 10 days before and after its earnings report, based on data from the past quarters. Typically, CRC sees a +1.87% change in stock price 10 days leading up to the earnings, and a +1.30% change 10 days following the report. On the earnings day itself, the stock moves by +0.51%. This data can give you a slight idea of what to expect for the next quarter's release.
Positive
Exceptional Year Performance: 2024 was an exceptional year for CRC, with successful execution of key targets and meaningful cost reductions.
Strategic Partnership Announcement: The company announced a significant deal with National Cement, validating its carbon management business model and ability to provide solutions for industrial partners.
Oil and Gas Production Strength: CRC is California’s largest oil and gas producer, supported by quality proved reserves and a deep inventory, which unlocks significant synergies.
Strong Operational Performance: The company achieved net production of 141,000 BOE per day and realized oil prices at 99% of Brent, demonstrating strong operational performance.
Strong Financial Performance: Adjusted EBITDAX for the quarter was $316 million, and free cash flow generated was $118 million, reflecting disciplined execution and cost control.
Cost Reduction Achievement: The company reduced combined operating and transportation costs by 4% compared to initial guidance, totaling $344 million.
Production and Decline Rates: CRC closed out 2024 with gross production of 163,000 BOE per day and maintained a low annual gross decline of about 6%.
Investment and Cost Reduction: The company plans to invest $285 million to $335 million in 2025, with expected controllable cost structure estimated to be nearly 16% lower than the pro forma combined 2023 organization.
Oil Production Hedging Strategy: More than 70% of expected 2025 oil production is hedged at an average price of $67 per barrel, reducing commodity price risk.
Resource Adequacy Payment Increase: The resource adequacy power capacity payments are expected to increase by 50% to $150 million, enhancing revenue streams in natural gas marketing and power.
Strong Liquidity Position: CRC has more than $1 billion of liquidity and has rebuilt cash on hand to over $350 million at year-end, reflecting the strength of its conventional asset business.
Shareholder Return Commitment: The company returned about 85% of 2024 free cash flow to shareholders through dividends and share repurchases, demonstrating commitment to shareholder returns.
Negative
Earnings Miss Report: California Resources Corporation missed earnings expectations with a reported EPS of $0.91, falling short of the anticipated $0.96.
Production vs. Market Expectations: Despite achieving a net production of 141,000 BOE per day, the company faced challenges in meeting market expectations for earnings, indicating potential operational inefficiencies.
G&A Expense Reduction: The company reported a decline in G&A expenses by 10% quarter over quarter, which may suggest previous inefficiencies that needed addressing.
Cash Flow vs. Earnings Concerns: While the company highlighted a strong cash flow generation of $355 million, the overall earnings miss raises concerns about the sustainability of this performance going forward.
Production Decline Forecast: The anticipated production for 2025 is estimated at about 135,000 BOE per day, which is lower than the current production levels, indicating a potential decline in output.
Competitive Challenges in Carbon Management: The company is facing significant competition in the carbon management sector, which may impact its ability to secure contracts and maintain profitability in this emerging market.
California Resources Corporation (NYSE:CRC) Q4 2024 Earnings Call Transcript
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