Business3 min
California Resources Beats Earnings Estimates, but Shares Barely Move
The Long Beach-based oil producer topped Wall Street forecasts in the third quarter while betting on pipelines and carbon capture to lift its margins.
California Resources Corporation (NYSE:CRC) reported third-quarter 2026 results on November 3, and the numbers came in ahead of expectations. Adjusted earnings reached $1.17 per share against a consensus of $0.96, and revenue hit $1.10 billion, well above the $956.9 million analysts had forecast. Adjusted EBITDAX, a measure of cash profit before interest, taxes, depreciation and exploration costs, came in at $341 million, above the top of the company's own guidance range.
Investors barely reacted. The stock closed at $51.99, down about 1.05% from $52.54, and it still sits comfortably inside its 52-week band of $43.25 to $71.98. For shareholders, a clean beat didn't translate into a rally, which often signals that the market wants to see more than one strong quarter before it changes its view.
The operating picture helps explain the caution. Output averaged 152,000 barrels of oil equivalent per day, roughly 2% higher than the previous quarter, and about 80% of that was oil. Free cash flow reached $142 million. But operating costs climbed by $39 million to $386 million, mostly because natural gas prices at the SoCal Border more than doubled and diesel expenses rose for drilling crews. Since fuel swings can move costs by several dollars per barrel from one quarter to the next, the company's profits depend heavily on energy prices it does not control.
Oil prices tell a similar story. CRC realized about 91% of the Brent benchmark before hedges, the low end of its guidance, because of contract repricing and limits on how crude moves out of the state. Management expects that figure to climb to around 92% in the fourth quarter as new market routes come online and the San Pablo Bay Pipeline nears restart.
That pipeline is the centerpiece of the quarter's deal-making. CRC closed its all-cash purchase of Crimson Midstream for about $63 million, a price the company framed as 4.4 times estimated 2027 adjusted EBITDAX. The deal adds a roughly 2,000-mile network that links Central California fields to higher-value buyers, along with land rights that could eventually support a CO2 pipeline. Management is aiming to restart the San Pablo Bay line in the first quarter of 2027. Chief Financial Officer Clio Chang said that improvement could add about $40 million in annual EBITDA for every percentage point gained in oil realizations, based on 120,000 barrels per day and $90 Brent pricing.
The company is also trimming its footprint. CRC agreed to sell its non-core Uinta Basin assets in Utah for roughly $90 million in cash, a deal expected to close by the end of 2026. The sale should free about $35 million in 2026 drilling and completion spending that can go toward shareholder returns and other priorities. The bigger message is focus: CRC wants to be a California operator, with pipelines and carbon management doing more of the heavy lifting.
For readers, the takeaway is that CRC's quarter was solid but not spectacular, and its next moves are about infrastructure. If the San Pablo Bay Pipeline reopens on schedule and realizations improve, the company's cash flow could look very different by 2027. Until then, fuel costs and pricing gaps will keep testing that promise. Read the original Investing.com report on CRC's third-quarter slides.
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