California Resources Corporation (CRC) Stock Swoons Despite Positive Guidance

California Resources Corporation (CRC) released its quarterly outlook, expecting strong results for the fourth quarter of 2023. The company anticipates free cash flow in the range of $40 million to $60 million and total production of approximately 82,000 to 84,000 barrels of oil equivalent per day, with around 60% of the production being oil. Additionally, CRC forecasts total capital expenditure to be in the range of $65 million to $75 million for the same period.

Todd Stevens, CRC's President and CEO, expressed confidence in the company's performance, stating, "We are expecting to exceed quarterly free cash flow and to be in line with production guidance." He also highlighted the progress in advancing CRC's carbon management business, including the draft permit for Class VI reservoir and the development of midstream infrastructure for carbon capture and storage.

The market reacted to this news with a 2.5% decline in CRC's stock, which is now trading at $52.60 per share.

The full 8-K submission from California Resources Corporation is available here.

2018 2019 2020 2021 2022 2023
Revenue (MM) $3,064 $2,634 $56 $1,889 $2,707 $2,757
Revenue Growth n/a -14.03% -97.87% 3273.21% 43.3% 1.85%
Net Margins 11% -1% 18% 32% 19% 17%
Net Income (MM) $328 -$28 $10 $612 $524 $459
Diluted Shares (MM) 47 49 83 83 78 69
Current Ratio 1.05 0.69 0.7 0.88 0.97 1.34
Total Debt (MM) $5,251 $5,077 $1,330 $589 $592 $589

California Resources has weak revenue growth and decreasing reinvestment in the business, weak operating margins with a stable trend, and negative expected EPS Growth. On the other hand, the company benefits from low leverage and irregular cash flows.

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