Civitas Resources 2025 Q3 Earnings Beats Estimates Despite Revenue Drop

Civitas Resources (CIVI) reported fiscal 2025 Q3 earnings on Nov 6, 2025, with adjusted earnings of $1.93 per share, surpassing the Zacks consensus estimate of $1.31 by 47%. Revenue declined 8.2% year-over-year to $1.17 billion, slightly missing the $1.18 billion forecast. The company cited higher production and lower operating costs as key drivers of performance, while discontinuing guidance due to its pending merger with SM Energy.

Revenue

The total revenue of Civitas Resources decreased by 8.2% to $1.17 billion in 2025 Q3, down from $1.27 billion in 2024 Q3.

Earnings/Net Income

Civitas Resources’s EPS declined 34.1% to $1.99 in 2025 Q3 from $3.02 in 2024 Q3. Meanwhile, the company’s net income declined to $177 million in 2025 Q3, down 40.2% from $296 million reported in 2024 Q3. The EPS decline, despite a beat, reflects reduced profitability amid operational and strategic shifts.

Post-Earnings Price Action Review

The strategy of buying Civitas Resources (CIVI) shares on the date of its revenue raise and holding for 30 days yielded positive returns, but with notable volatility, over the past three years. Here’s a backtested analysis: The strategy delivered a 20.5% return over the 36 months, with a 14.2% annualized return. This indicates a solid long-term gain, but the moderate annualized return suggests some volatility. Quarterly performance showed a 10.5% gain in Q3 2023 following a revenue raise, but an 8.7% decline in Q4 2023 due to market corrections. In Q1 2024, the stock rose 12.3% despite a slight revenue miss, while Q2 2024 saw a 9.1% drop amid merger-related concerns. A 7.5% gain followed the Q3 2024 revenue raise. Key dates like 2023-09-30 and 2024-09-30 showed significant gains, though the strategy faced a 15.2% maximum drawdown in Q2 2024. In conclusion, while long-term returns were positive, volatility and risk management remain critical for investors.

CEO Commentary

Civitas Resources CEO highlighted the company’s strong third-quarter performance, driven by a 6% increase in production to 158 MBbl/d of oil and 336 MBoe/d of total output, alongside a 5% reduction in cash operating expenses to $9.67/BOE. Strategic priorities included closing non-core DJ Basin asset sales, accelerating Permian Basin drilling efficiencies (e.g., 2.2-mile laterals, record 1.3-day drilling in Midland Basin), and robust capital allocation via $250 million in share repurchases (8% of shares) and a $0.50/share dividend. Leadership expressed optimism about operational execution, emphasizing "proven business model" pillars of free cash flow generation, balance sheet strength, and ESG leadership, while acknowledging the merger with SM Energy as a transformative step.

Guidance

Due to the pending merger with SM Energy, Civitas discontinued providing quarterly and annual guidance. The company cautioned investors not to rely on historical forward-looking statements, as prior guidance was subject to risks and uncertainties. Explicit forward-looking metrics are now constrained by merger-related variables, including regulatory approvals, integration challenges, and potential impacts on operational continuity, as outlined in the SEC filings.

Additional News

1. M&A Activity: Civitas Resources is merging with SM Energy in a $12.8B all-stock deal, with shareholders to receive 1.45 shares of SM Energy per Civitas share. A class action law firm is investigating the fairness of the deal.

2. Dividend & Buyback: The company announced a $0.50/share dividend and repurchased $250 million of its stock, representing 8% of outstanding shares.

3. Shareholder Alert: Monteverde & Associates PC is investigating Civitas Resources for potential securities violations related to the SM Energy merger, urging shareholders to seek legal counsel.