California Resources Corporation reported its third‑quarter 2025 results on November 4, 2025, showing an adjusted earnings per share of $1.46 that beat the consensus estimate of $1.31 by $0.15, or 11.5%. The diluted EPS, however, fell to $0.76, missing the analyst expectation of $0.76‑plus and underscoring the impact of the company’s high‑leverage capital structure on earnings dilution. Total revenue for the quarter was $855 million, a 2.7% decline from the consensus estimate of $879 million and a 36% drop from the $1.35 billion reported a year earlier. Operating income fell to $98 million from $267 million in the prior quarter, while net income dropped to $64 million from $172 million, reflecting higher operating costs and a lower commodity‑price environment.
The company generated $188 million in free cash flow and maintained $1.154 billion in total liquidity. In line with its shareholder‑return strategy, CRC raised its quarterly cash dividend by 5% to $0.405 per share and repurchased $101 million of common stock during the quarter, leaving $205 million of the $306 million share‑repurchase authorization still available. CRC also redeemed all remaining 2026 senior notes early and completed a private offering of $400 million in 7.000% senior notes due 2034, proceeds of which will be used to repay debt related to the pending Berry merger and cover transaction costs.
CEO Francisco Leon said the quarter demonstrated “the strength of the CRC business model and our disciplined approach to creating long‑term shareholder value.” He added that the merger with Berry will “create a stronger, more efficient California energy leader” and is “attractively valued and immediately accretive across key financial metrics, strengthening our ability to deliver sustainable value to shareholders.” Leon highlighted expected synergies that should lower costs and generate higher free cash flow once the merger closes in early 2026.
Management guided for Q4 2025 adjusted EBITDAX of $220–$260 million, a decline from the $280 million reported in Q3, indicating a cautious outlook for near‑term demand. Full‑year 2026 guidance will be released with the Q4 earnings call. The guidance reflects management’s confidence in maintaining profitability through cost discipline while acknowledging the potential impact of commodity‑price volatility on revenue growth.
The adjusted EPS beat was largely driven by strict cost controls and operational leverage that offset a 4% decline in revenue. The revenue miss was attributed to weaker commodity prices and a modest decline in demand for CRC’s core products, which outweighed the positive impact of higher‑margin segments. Despite the revenue shortfall, the company’s robust free‑cash‑flow generation and strong liquidity position support its dividend increase and share‑repurchase program, reinforcing confidence in its financial health. The pending Berry merger is expected to deliver significant synergies, further strengthening CRC’s competitive position in California’s energy and carbon‑management markets.
The company’s focus on carbon‑capture and storage projects, including the first EPA Class VI well permits for CO₂ injection in California, positions CRC to benefit from the growing demand for low‑carbon solutions as the state advances its climate goals. These initiatives, combined with the merger, are expected to enhance CRC’s long‑term growth prospects and shareholder value.
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