分组1 - California Resources Corporation (CRC) reported quarterly earnings of $1.46 per share, exceeding the Zacks Consensus Estimate of $1.31 per share, but down from $1.5 per share a year ago, resulting in an earnings surprise of +11.45% [1] - The company posted revenues of $855 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.74%, and down from $1.35 billion year-over-year [2] - Over the last four quarters, California Resources has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] 分组2 - The stock has underperformed the market, losing about 9.1% since the beginning of the year compared to the S&P 500's gain of 16.5% [3] - The current consensus EPS estimate for the coming quarter is $0.61 on revenues of $806.46 million, and for the current fiscal year, it is $4.15 on revenues of $3.44 billion [7] - The Zacks Industry Rank for Oil and Gas - Exploration and Production - United States is currently in the bottom 20% of over 250 Zacks industries, indicating potential challenges for the sector [8]

Financial Performance - Reported net income of $64 million, adjusted net income of $123 million, and $338 million of adjusted EBITDAX for Q3 2025[5] - Total operating revenues for Q3 2025 were $855 million, a decrease of 37% compared to $1,353 million in Q3 2024[31] - Net income for Q3 2025 was $64 million, down from $345 million in Q3 2024, representing an 81% decline[31] - Adjusted net income for Q3 2025 was $123 million, compared to $137 million in Q3 2024, a decrease of 10%[31] - Operating income for Q3 2025 was $98 million, down from $518 million in Q3 2024, a decline of 81%[31] - Total operating expenses for Q3 2025 were $756 million, an increase from $835 million in Q3 2024[31] - The effective tax rate for Q3 2025 was 15%, compared to 29% in Q3 2024[31] - Adjusted EBITDAX for Q3 2025 was $338 million, compared to $324 million in Q2 2025 and $402 million in Q3 2024[48] Cash Flow and Liquidity - Generated $279 million in net cash provided by operating activities and $188 million in free cash flow[5] - Ended Q3 2025 with $180 million in available cash and cash equivalents, $974 million in available borrowing capacity, and total liquidity of $1,154 million[5] - Net cash provided by operating activities for Q3 2025 was $279 million, up from $165 million in Q2 2025 and $220 million in Q3 2024[32] - Liquidity as of September 30, 2025, was $1,154 million, down from $1,337 million as of December 31, 2024[36] Production and Capital Expenditures - Delivered 137 MBoe/d of total production, with 78% being oil, and total capital expenditures of $91 million[5] - Total gross production for Q3 2025 was 155 MBoe/d, a decrease from 165 MBoe/d in Q3 2024, but consistent with the production levels seen in Q2 2025[62] - The company drilled a total of 20 wells in Q3 2025, including 2 primary development wells and 12 steamflood wells, indicating ongoing investment in production capacity[66] - Total capital investment in Q3 2025 was $91 million, compared to $56 million in Q2 2025 and $79 million in Q3 2024[34] Shareholder Returns - Increased quarterly dividend by 5% to $0.405 per share, reinforcing commitment to shareholder returns[5] - Committed to returning $454 million to shareholders in the first nine months of 2025, including $352 million in share repurchases and $102 million in dividends[15] Mergers and Acquisitions - Announced a definitive agreement to merge with Berry Corporation in an all-stock transaction, with a 15% premium over Berry's closing price prior to the announcement[8] - Completed a private offering of $400 million in senior notes due 2034 to repay Berry's outstanding debt and cover transaction costs[9] Sustainability and Environmental Performance - Received "Grade A" certification for methane emissions performance, highlighting commitment to sustainability[18] Segment Performance - Segment profit for the Oil & Natural Gas segment in Q3 2025 was $182 million, down from $194 million in Q2 2025 and $298 million in Q3 2024[50] - Adjusted EBITDAX for the Oil & Natural Gas segment was $332 million in Q3 2025, compared to $346 million in Q2 2025 and $474 million in Q3 2024[50] - The Carbon Management segment reported a loss of $21 million in Q3 2025, compared to a loss of $20 million in Q2 2025 and $25 million in Q3 2024[50] Sales and Pricing - Oil, natural gas, and natural gas liquids sales in Q3 2025 were $715 million, a 18% decrease from $870 million in Q3 2024[31] - The realized price of oil with derivative settlements in Q3 2025 was $67.04 per Bbl, compared to $75.38 per Bbl in Q3 2024, showing a decrease of 11% year-over-year[63] - The realized price of natural gas with derivative settlements in Q3 2025 was $3.47 per Mcf, up from $2.68 per Mcf in Q3 2024, reflecting a 30% increase year-over-year[63] Operating Expenses - General and administrative expenses increased to $87 million in Q3 2025 from $106 million in Q3 2024[31] - Other operating expenses net of other revenue for Q3 2025 totaled $25 million, down from $60 million in Q2 2025 and $71 million in Q3 2024, reflecting a 65% decrease year-over-year[60] - The company reported a total electricity generation expense of $11 million in Q3 2025, compared to $5 million in Q2 2025 and $9 million in Q3 2024, indicating increased operational costs[58]

Core Insights - California Resources Corporation (CRC) reported solid financial results for Q3 2025, highlighting the strength of its business model and commitment to shareholder value through a disciplined approach [5][7][14] - The company announced a 5% increase in its quarterly dividend, reflecting its commitment to sustainable shareholder returns [7][16][18] - CRC is in the process of merging with Berry Corporation in an all-stock transaction, which is expected to close in Q1 2026, subject to regulatory approvals [9][11][14] Financial Performance - CRC reported a net income of $64 million for Q3 2025, down from $172 million in Q2 2025, with adjusted net income of $123 million [7][8] - Total operating revenues for Q3 2025 were $855 million, a decrease from $978 million in Q2 2025 [8][40] - The company generated $279 million in net cash from operating activities and $188 million in free cash flow during the quarter [7][8] Production and Pricing - Net oil production averaged 107 thousand barrels per day (MBbl/d) in Q3 2025, slightly down from 109 MBbl/d in Q2 2025 [6][8] - Realized oil prices without derivative settlements increased to $66.32 per barrel (Bbl) from $65.07 per Bbl in the previous quarter [6][8] - Natural gas production increased to 118 million cubic feet per day (Mmcf/d) with a realized price of $3.47 per thousand cubic feet (Mcf), up from $2.79 per Mcf in Q2 2025 [6][8] Capital Investments and Liquidity - CRC's total capital investments for Q3 2025 were $91 million, with $43 million allocated to drilling, completions, and workover capital [7][8] - As of September 30, 2025, CRC had $180 million in available cash and cash equivalents, with a total liquidity of $1,154 million [21][19] - The company redeemed all remaining 2026 Senior Notes for $122 million, extending its maturity profile [7][20] Shareholder Returns - The board declared a quarterly cash dividend of $0.405 per share, payable on December 15, 2025, to shareholders of record on December 1, 2025 [17][18] - CRC has returned $454 million to shareholders in the first nine months of 2025, including $352 million in share repurchases and $102 million in dividends [15][18] Sustainability Initiatives - CRC received a "Grade A" certification for its methane emissions performance, demonstrating its commitment to sustainability [22][8] - The company plans to explore decarbonized power solutions in California through a memorandum of understanding with Capital Power [7][22]

Core Insights - Carbon TerraVault Holdings, LLC (CTV) has signed a memorandum of understanding (MOU) with Capital Power to manage up to 3 million metric tons of CO2 emissions annually, indicating a significant step in carbon management and decarbonization efforts in California [1][8] Financial Performance - In the third quarter of 2025, CTV reported other operating expenses of $10 million, a decrease from $14 million in the second quarter [4] - General and administrative expenses increased to $4 million from $3 million in the previous quarter [4] - Capital investments rose significantly to $15 million from $5 million in the second quarter [4] - Adjusted EBITDAX improved slightly to $(14) million from $(17) million in the second quarter [4] Future Guidance - For the fourth quarter of 2025, CTV expects capital investments to be between $15 million and $20 million [6][7] - Other operating expenses are projected to be between $12 million and $16 million, while general and administrative expenses are estimated to be between $2 million and $4 million [7] - Adjusted EBITDAX is anticipated to range from $(19) million to $(15) million [7] Strategic Developments - The California government has enacted SB 614, which allows for the safe transport of captured CO2 by pipeline, facilitating CCS development [8] - CTV is on track to complete California's first CCS project at the Elk Hills cryogenic gas plant by the end of 2025, with the first CO2 injection expected in early 2026, pending regulatory approvals [8] - CTV is in discussions with multiple parties to supply power from the Elk Hills Power Plant, leveraging CO2 storage reservoirs for decarbonized energy solutions [8] - Plans are underway to submit additional Class VI permit applications to the EPA for approximately 100 million metric tons of CO2 storage in Central California [8]

Core Viewpoint - The Memorandum of Understanding (MOU) between California Resources Corporation (CRC) and Capital Power aims to explore carbon management services, specifically targeting the transportation and sequestration of up to 3 million metric tons of CO2 emissions annually, supporting California's decarbonization goals [1][3][8] Company Overview - California Resources Corporation (CRC) is an independent energy and carbon management company focused on energy transition and environmental stewardship while providing responsibly sourced energy [4] - Carbon TerraVault (CTV), CRC's carbon management business, is developing services for capturing, transporting, and permanently storing CO2, engaging in various carbon capture and sequestration (CCS) projects [5] - Capital Power is a growth-oriented power producer with approximately 12 GW of power generation capacity across 32 facilities in North America, emphasizing reliable and affordable power while building lower-carbon power systems [6] MOU Details - The MOU signifies a partnership to evaluate and develop CCS solutions for Capital Power's La Paloma facility, a 1.1 GW natural gas combined cycle generation facility located in Kern County, California [8] - CTV plans to serve as the exclusive provider for transportation and sequestration services for the targeted 3 million metric tons of captured CO2 per annum, aligning with California's broader decarbonization objectives [8] - The collaboration will also assess potential data center sites, power infrastructure needs, regulatory permitting, and further integration opportunities [8]

Core Insights - California Resources Corporation is focusing on local oil production to address high gas prices and energy affordability in California, which pays about 40% higher prices than the rest of the US [3][5] - The company is committed to providing reliable, affordable, and clean energy, emphasizing the importance of oil in California's energy landscape [5][6] - California Resources Corporation has initiated a carbon capture and storage (CCS) project to decarbonize its operations and meet environmental standards [7][10] Company Strategy - The company aims to leverage its natural gas supply and existing power plant capacity to support the growing demand for clean energy, particularly from data centers [9][10] - California Resources Corporation is tailoring its services to assist carbon-intensive industries, such as cement production, in achieving net-zero emissions [11][12] - The company is positioning itself as a market solution provider, helping manufacturers and power plants reduce emissions while maintaining competitiveness [7][12] Market Context - California consumes approximately 9% of the oil in the US, highlighting the significant market potential for local production [3] - The exit of major companies like Chevron from California presents an opportunity for California Resources Corporation to strengthen its market position [4][5] - The company is optimistic about the future of the energy market in California, citing a population of 40 million that still relies on oil [5][6]

Core Insights - Three stocks with strong income characteristics and buy rank are highlighted for investors to consider on October 20 Group 1: HF Sinclair Corporation (DINO) - The Zacks Consensus Estimate for HF Sinclair's current year earnings has increased by 53.6% over the last 60 days [1] - The company has a dividend yield of 3.9%, which is higher than the industry average of 3.2% [1] Group 2: Polaris Inc. (PII) - Polaris has seen the Zacks Consensus Estimate for its current year earnings rise by 70% over the last 60 days [2] - The company offers a dividend yield of 4%, significantly above the industry average of 0.0% [2] Group 3: California Resources Corporation (CRC) - The Zacks Consensus Estimate for California Resources' current year earnings has increased by 5.5% over the last 60 days [2] - The company has a dividend yield of 3.3%, compared to the industry average of 0.0% [3]

Core Insights - California Resources Corporation (CRC) has initiated the groundbreaking for Carbon TerraVault I (CTV I), marking a significant step towards California's clean energy future and its goal of carbon neutrality by 2045 [1][2] Project Overview - CTV I is California's first carbon capture and storage (CCS) project, designed to reduce emissions and support the state's sustainability goals [1][2] - The project will utilize existing facilities at CRC's Elk Hills, with a CO₂ storage capacity of up to 1.6 million metric tons annually and a total potential of 38 million metric tons in the 26R reservoir [2] Strategic Importance - CTV I is a cornerstone of California's emerging CCS industry and has received final Class VI permits from the U.S. Environmental Protection Agency, setting a new standard for CCS deployment in the state [3] - The project is part of a joint venture between CRC and Brookfield, with CRC holding a 51% stake [8] Economic and Environmental Impact - The project is expected to create high-quality jobs in the Central Valley while contributing to environmental sustainability [3] - Brookfield has invested over half a trillion dollars in infrastructure across the U.S., highlighting the significance of CTV I within its broader energy investment strategy [4] Community Engagement - Local leaders, including Taft Mayor Dave Noerr, emphasize the project's role in continuing the region's legacy of energy innovation and environmental responsibility [4]

Core Viewpoint - California Resources Corporation (CRC) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system is based on changes in earnings estimates, tracking EPS estimates from sell-side analysts through a consensus measure known as the Zacks Consensus Estimate [2]. - The recent upgrade reflects a 14.2% increase in the Zacks Consensus Estimate for California Resources over the past three months, with expected earnings of $4.20 per share for the fiscal year ending December 2025, showing no year-over-year change [9]. Impact on Stock Prices - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements, particularly due to the actions of institutional investors [5]. - Rising earnings estimates and the corresponding rating upgrade suggest an improvement in California Resources' underlying business, which could lead to increased stock prices as investors respond positively [6]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of California Resources to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11].

Core Insights - Three stocks with strong buy rankings and value characteristics are highlighted for investors: Weatherford International, Federated Hermes, and California Resources Weatherford International (WFRD) - The company specializes in drilling solutions, gas well unloading, restoration, and related activities [1] - It has a Zacks Rank of 1 (Strong Buy) and a 11% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [1] - The price-to-earnings (P/E) ratio is 11.83, significantly lower than the industry average of 17.30 [2] - Weatherford possesses a Value Score of A [2] Federated Hermes (FHI) - This global asset manager provides investment advisory, administrative, and distribution services for various investment products [3] - It also holds a Zacks Rank of 1 and has seen a 2.2% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [3] - The P/E ratio stands at 11.33, compared to the industry average of 12.90 [4] - Federated Hermes has a Value Score of B [4] California Resources (CRC) - The company focuses on oil and natural gas exploration and production, primarily based in California [5] - It carries a Zacks Rank of 1 and has experienced a 5.5% increase in the Zacks Consensus Estimate for current year earnings over the last 60 days [5] - The P/E ratio is 11.41, well below the industry average of 43.10 [5] - California Resources also has a Value Score of B [5]