Dorchester Minerals 2025 Q1 Earnings Revenue Up 39.9%, Net Income Declines 2.9%

Dorchester Minerals (DMLP) reported its fiscal 2025 Q1 earnings on May 08th, 2025. Dorchester Minerals experienced notable growth in its operating revenues, which reached $43.16 million, a significant increase from $30.98 million in the previous year's Q1. However, the company's net income for the first quarter was slightly below expectations, totaling $17.64 million ($0.36 per common unit), compared to $18.17 million ($0.44 per unit) in the same period last year. The Partnership has reiterated its cautious outlook amidst fluctuating oil and natural gas prices, planning strategic investments to maintain market presence.

Revenue
Dorchester Minerals saw a substantial increase in total revenue for Q1 2025, rising by 39.9% to $42.62 million, up from $30.48 million in Q1 2024. The royalties segment was the main contributor, generating $37.83 million, followed by net profits interest at $4.79 million. Lease bonus and other income added $541,000, culminating in total operating revenues of $43.16 million.

Earnings/Net Income
Dorchester Minerals experienced an 18.2% decline in EPS, which fell to $0.36 in Q1 2025 from $0.44 in Q1 2024. Net income decreased by 2.9% to $17.64 million, compared to $18.17 million in the previous year's quarter. Despite the decline, the EPS reflects a sustained profitability trend, although slightly below industry expectations.

Price Action
The stock price of Dorchester Minerals has edged up 0.95% during the latest trading day, has dropped 3.55% during the most recent full trading week, and has edged up 2.29% month-to-date.

Post-Earnings Price Action Review
Dorchester Minerals has shown resilience in its post-earnings strategy of buying shares after a quarterly revenue drop and holding them for 30 days. This approach has historically delivered impressive returns, outperforming the benchmark by 37% with a total return of 129.56% over the past five years. Despite facing a maximum drawdown of -32.17%, the strategy maintains a commendable CAGR of 18.16% and a Sharpe ratio of 0.52. However, investors should be aware that the volatility remains relatively high at 34.67%, suggesting that while the strategy has been profitable, it could present a bumpy ride. Overall, the strategy underscores its potential to capture medium-term gains, even amid market fluctuations.

CEO Commentary
Dorchester Minerals, L.P. CEO emphasizes the Partnership's solid performance for the first quarter of 2025, reporting a net income of $17.6 million, supported by operating revenues of $43.2 million, reflecting growth from the previous year. The CEO acknowledges challenges in maintaining net income levels compared to the prior year's $18.2 million but remains optimistic about the Partnership’s ability to navigate market fluctuations. Strategic priorities include enhancing market positioning through continued investment in mineral interests across 28 states, underscoring a commitment to long-term growth despite prevailing industry uncertainties.

Guidance
The Partnership anticipates continued fluctuations in oil and natural gas prices, impacting future revenues and net income. There is a cautious outlook regarding ongoing economic and regulatory changes that may affect operations and financial performance. The Partnership plans to focus on strategic investments to bolster its market presence, aiming to mitigate potential risks while optimizing cash distributions for unitholders. Forward-looking statements reflect a commitment to navigate these uncertainties, with expectations to adapt strategies as market conditions evolve.

Additional News
Dorchester Minerals, L.P. announced two significant acquisitions in recent weeks, expanding its mineral and royalty interests. On September 12, 2024, the Partnership agreed to acquire approximately 14,529 net royalty acres across New Mexico and Texas, focusing heavily on the Delaware and Midland Basins. In a separate deal, the Partnership acquired 1,204 net royalty acres in Weld County, Colorado. Both transactions were executed through non-taxable exchanges, issuing a total of 7,251,144 common units to contributing entities. These strategic acquisitions bolster Dorchester Minerals' portfolio, enhancing its presence in key oil and gas regions across multiple states. Additionally, Dorchester Minerals has appointed Mr. F. Damon Box to its Board of Managers, bringing extensive experience in corporate finance and energy investments to drive the Partnership's strategic goals.