Why Is California Resources (CRC) Up 3.2% Since Last Earnings Report?

Core Viewpoint - California Resources Corporation (CRC) has experienced a 3.2% increase in share price since the last earnings report, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1] Financial Performance - Total operating revenues for Q3 2025 were $855 million, a 37% decrease year over year from $1,353 million in Q3 2024, and below the Zacks Consensus Estimate of $879 million [2] - Adjusted EPS was $1.46, down 3% year over year from $1.50 in Q3 2024, but exceeded the Zacks Consensus Estimate of $1.31 [2] - Net income fell to $64 million, an 81% decline year over year from $345 million in Q3 2024 [8] Production and Operations - Net oil production was 107 MBbl/d, a 5% decrease year over year from 113 MBbl/d, and below the Zacks Consensus Estimate of 108 MBbl/d [3] - Total production of oil and natural gas was 137 Mboe/d, flat quarter over quarter but down 6% year over year from 145 Mboe/d [8] Revenue Drivers - The decline in revenue was primarily due to a shift in commodity derivative outcomes, resulting in a net loss in Q3 2025 compared to a substantial gain in Q3 2024, accounting for approximately $498 million of the year-over-year revenue difference [4] - Oil realizations were strong, with oil prices at 97% of Brent and gas prices at a premium to NYMEX, while the oil mix was approximately 78% [4] Segment Performance - Carbon management operations recorded a segment loss as CRC continued to invest in permitting and early-stage project work [5] - Electricity margins improved due to favorable pricing and operating conditions, while marketing margins from purchased commodities remained stable [5] Balance Sheet and Liquidity - CRC ended the quarter with $180 million in cash and cash equivalents, with total liquidity exceeding $1.1 billion [6] - Operating cash flow was $279 million, and capital investments totaled $91 million [6] - The quarterly dividend was increased by 5% to $0.405 per share, with over $200 million remaining for buyback authorization through mid-2026 [6] Management Outlook - Management projects net production for Q4 2025 to be between 131–135 Mboe/d, with oil comprising about 78% [7] - Operating costs are expected to be around $310 million, with adjusted EBITDAX guidance at $240 million at the midpoint [7] - Capital spending is forecasted at approximately $115 million, with reaffirmed 2025 capital expenditure guidance of $280–$330 million [7] - The pending Berry merger is anticipated to generate $80–$90 million in annual synergies within 12 months [9] Industry Context - California Resources operates within the Zacks Oil and Gas - Exploration and Production - United States industry, where Magnolia Oil & Gas Corp has seen a 9.6% gain over the past month [13] - Magnolia Oil & Gas reported revenues of $324.93 million for the last quarter, reflecting a year-over-year change of -2.5% [14]