California Resources 2025 Q1 Earnings Beats Expectations with Net Income Rebounding 1250%

California Resources (CRC) reported its fiscal 2025 Q1 earnings on May 07th, 2025. The company posted an EPS of $1.07, surpassing analysts' expectations of $0.77, marking a significant beat. California Resources' guidance remains in line with previous estimates, maintaining its production and capital investment plans for 2025. The company confirmed its commitment to a one-rig program in the first half of the year, increasing to two rigs in the second half. CRC also reaffirmed its adjusted EBITDAX guidance, showcasing strong financial discipline and operational resilience.

Revenue

Earnings/Net Income

California Resources returned to profitability with an EPS of $1.27 in 2025 Q1, recovering from a loss of $0.14 per share in 2024 Q1. The company achieved a net income of $115 million, marking a dramatic 1250.0% improvement from a net loss of $10 million in the previous year. This EPS performance is a strong indicator of the company's successful turnaround.

Price Action

Post-Earnings Price Action Review

The investment strategy of acquiring California Resources (CRC) shares following a quarter-over-quarter revenue decline and holding them for 30 days has yielded a 101.97% return over the past five years. This performance significantly outpaces the benchmark return of 64.74%, delivering an excess return of 37.22% and a compound annual growth rate (CAGR) of 16.89%, highlighting robust profitability. Despite this impressive return, the strategy experienced a maximum drawdown of -28.55% and a Sharpe ratio of 0.74, which indicates moderate risk and returns. This reflects the strategy's effectiveness in capitalizing on market conditions while managing investment risk.

CEO Commentary

"We delivered a strong start to 2025, executing our business plan that allows us to create value in a volatile macro environment while returning a record quarterly amount of capital to shareholders," said CRC President and CEO Francisco Leon. He emphasized the company's integrated strategy, which includes low-decline conventional assets and a scalable carbon management platform, positioning CRC to generate sustainable free cash flow across cycles. Leon expressed satisfaction with the Aera integration and the realization of $185 million in synergies. With 70% of oil production hedged for 2025 and a right-sized cost structure, he remains confident in CRC's performance.

Guidance

CRC expects net production for the second quarter of 2025 to range between 133,000 to 137,000 barrels of oil equivalent per day, with full-year production guidance set between 132,000 to 138,000 barrels of oil equivalent per day. The company will maintain a one rig program in the first half of 2025 and plans to increase to a two rig program in the second half, utilizing existing permits. CRC anticipates sufficient permits to support its capital program throughout 2025.

Additional News

In recent developments, California Resources has been actively managing its debt and capital structure. The company redeemed $123 million of its 2026 Senior Notes in February 2025 and expects to redeem the remaining $122 million by the end of the year. Additionally, CRC has been committed to returning cash to shareholders, evidenced by the repurchase of 2.3 million shares for $100 million during Q1 2025. This buyback aligns with their ongoing program, which has returned approximately $1,195 million to shareholders since mid-2021. Furthermore, CRC's Board of Directors declared a quarterly cash dividend of $0.3875 per share, reinforcing its commitment to rewarding shareholders.