How did CIVI's Q4 earnings surprise investors?

Civitas Resources' Q4 earnings fell short of investor expectations in several key aspects, leading to a negative reaction in the market: 1. **Earnings Per Share (EPS) Miss**: The company reported an EPS of $1.78 for Q4 2024, which was below the forecasted $1.94. This discrepancy of $0.16 per share resulted in a significant earnings miss, contributing to the stock's decline. 2. **Revenue Shortfall**: Civitas Resources' revenue for the quarter was $1.29 billion, slightly below the anticipated $1.3 billion. While the shortfall may seem minimal, it still represented a deviation from expectations, particularly given the company's operational scale. 3. **Operating Expenses Rise**: A notable increase of 23.7% in operating expenses from the previous year's quarter was reported. This rise, combined with the revenue shortfall, likely impacted profitability more than anticipated, further contributing to the earnings miss. 4. **Oil Output Forecast Below Consensus**: Roth MKM analysts noted that Civitas' 2025 oil output forecast was 4.4% below market consensus. This forecast likely influenced investor perceptions of the company's future growth and profitability. 5. **Workforce Reduction and Strategic Changes**: Civitas announced a 10% reduction in its workforce. While this move may be seen as a cost-saving measure, it could also indicate underlying operational challenges that may have affected investor confidence. The combination of these factors led to a significant negative surprise for investors, resulting in a drop in the company's stock price and a downgrade from KeyBanc.