California Resources Corporation Q4 2024 Earnings Preview: Analyst Insights and Expectations for Revenue Growth

01 Mar, 2025

California Resources Corp Earnings Forecast: What You Should Know Beyond Headline Estimates

Earnings Report Date: March 3, 2025 (Before Market Open)

California Resources Corporation (CRC), a premier independent oil and natural gas company headquartered in California, is poised to unveil its Q4 2024 earnings report on March 3, 2025, before the market opens. As investors brace for this pivotal announcement, it’s essential to delve deeper than the headline figures to grasp the company’s strategic direction, operational performance, and potential investment allure.

Q4 2024 Expectations vs. Previous Performance

For Q4 2024, ending December 31, 2024, analysts have outlined the following projections:

EPS Estimate: $0.97 (average), with a range spanning $0.74 to $1.26
Revenue Estimate: $901.36 million (average), with estimates fluctuating between $836 million and $932.81 million

These projections signify:

A modest 4.1% year-over-year EPS growth compared to Q4 2023’s $0.93
A substantial 24.1% year-over-year revenue growth from $726 million in Q4 2023

This juxtaposition of a modest EPS increase against a notable revenue surge suggests that while CRC is expanding its top line, there may be underlying factors affecting profitability, such as rising operational costs or changes in market dynamics.

Recent Earnings Performance

CRC’s recent earnings trajectory presents a mixed bag, reflecting both resilience and challenges:

Quarter	Actual EPS	Estimated EPS	Surprise
Q3 2024	$1.50	$1.35	+11.0%
Q2 2024	$0.60	$0.68	-11.4%
Q1 2024	$0.75	$0.64	+18.1%
Q4 2023	$0.93	$0.91	+1.8%

“The company’s ability to consistently outperform estimates in three out of the last four quarters underscores its operational resilience, even amidst market volatility.”

Despite an unexpected dip in Q2 2024, CRC has demonstrated an overall strong performance, highlighting its capacity to navigate fluctuating market conditions and maintain investor confidence through strategic management and robust operational practices.

EPS Trend Analysis

Examining the EPS trend for Q4 2024 reveals slight downward revisions over the past few months:

Current estimate: $0.97
90 days ago: $1.03
60 days ago: $0.98
30 days ago: $0.98

This modest downward adjustment suggests that analysts have adopted a more cautious stance regarding CRC’s near-term profitability. However, the stability in estimates over the past 30-60 days indicates that the consensus has largely stabilized, reflecting a balanced outlook amidst evolving market conditions.

Full-Year 2024 Outlook

Looking at the full-year 2024, analysts anticipate:

EPS: $3.89 (average), marking a 24.2% decline from $5.13 in 2023
Revenue: $2.98 billion, representing a 6.3% increase from $2.80 billion in 2023

The projected decline in annual EPS, despite revenue growth, suggests that CRC may be experiencing margin pressures. This could stem from increased operating costs, rising capital expenditures, or fluctuations in commodity prices. It’s imperative for investors to monitor how CRC manages these challenges to sustain profitability while expanding its revenue base.

Forward-Looking Indicators

Anticipating 2025, several key metrics stand out:

Q1 2025 EPS is projected at $0.96, reflecting a 28% increase from Q1 2024
Full-year 2025 revenue is expected to reach $3.39 billion, a 13.7% increase from 2024 estimates

However, it’s crucial to note that 8 analysts have downgraded their 2025 EPS estimates in the last 30 days, signaling a cautious outlook on CRC’s long-term profitability. This downward revision may be influenced by market uncertainties, regulatory changes, or shifts in energy demand dynamics.

Financial Health Indicators

CRC upholds a robust financial position with the following metrics:

Total Cash: $241 million ($2.63 per share)
Total Debt: $1.22 billion
Debt-to-Equity Ratio: 34.9%
Current Ratio: 0.97
Free Cash Flow: $308.38 million

The debt-to-equity ratio of 34.9% is relatively manageable within the energy sector, indicating a balanced approach to leveraging debt for growth. Furthermore, the strong free cash flow generation underscores CRC’s ability to fund operations, invest in growth opportunities, and return value to shareholders without excessive reliance on external financing.

Analyst Sentiment

Wall Street exhibits a highly optimistic stance towards CRC:

Mean Recommendation: 1.46 (Strong Buy)
Target Price Range: $57 to $80
Mean Target Price: $68.62 (53.8% upside from current price of $44.62)

All 13 analysts covering the stock maintain a positive outlook, with the consensus overwhelmingly favoring a “buy” recommendation. This strong analyst confidence reflects expectations of CRC’s continued operational strength, strategic initiatives, and potential for significant stock appreciation.

Key Factors to Watch

Investors should scrutinize several critical factors beyond the headline numbers in the upcoming earnings report:

Production Volumes: Changes in oil and gas production levels will directly impact revenue growth and operational efficiency. Higher production may drive revenues, but must be balanced against market demand and commodity prices.
Operating Margins: With projected revenue growth juxtaposed with an EPS decline for 2024, monitoring operating margins is essential. This metric will reveal whether margin pressures stem from increased costs, lower pricing, or other operational inefficiencies.
Capital Allocation Strategy: Updates on dividend policy, share repurchases, and capital expenditure plans will provide insights into CRC’s priorities and its commitment to returning value to shareholders versus reinvesting in growth opportunities.
Energy Transition Initiatives: CRC’s investments in carbon capture and storage projects signal a commitment to sustainability and adaptation to the evolving energy landscape. Progress updates in these initiatives could significantly influence long-term valuation and investor perception.
Guidance for 2025: Management’s outlook for the coming year is likely to have a more profound impact on stock performance than the Q4 results. Clear and optimistic guidance could bolster investor confidence, while cautious or negative projections might temper enthusiasm.

Conclusion

California Resources Corporation approaches its Q4 2024 earnings report with strong analyst support despite some moderation in earnings expectations. The company’s projected revenue growth, coupled with its robust free cash flow generation, lays a solid foundation for continued operational stability and growth. However, investors should diligently evaluate management’s commentary on margins and 2025 guidance to determine whether the prevailing analyst optimism is justified.

With the stock currently trading at $44.62, which is significantly below the average analyst target of $68.62, CRC may present a compelling investment opportunity if the company meets or exceeds expectations and offers a positive forward outlook. Nevertheless, the recent downward revisions in EPS estimates warrant a degree of caution as CRC navigates the complexities of the evolving energy landscape and seeks to maintain its competitive edge.

“Investors should weigh CRC’s strong revenue growth and free cash flow against the challenges of margin pressures and cautious analyst outlooks to make informed investment decisions.”

Summary

The expanded article maintains the original markdown structure while enhancing each section with deeper analysis, contextual information, and additional insights. Emphasis is added using italics and bold formatting, section breaks are inserted for clarity, and key takeaways are highlighted using blockquotes. This comprehensive approach ensures that readers gain a thorough understanding of CRC’s financial outlook and the factors influencing its performance.

Additional Resources

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You can visit California Resources Corp website here

Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. All trading and investment decisions should be made based on your own research, experience, and risk tolerance.