Civitas Resources (CIVI) witnessed a 5.07% plunge in its stock price during Monday's trading session, following the company's mixed fourth-quarter 2024 results and underwhelming 2025 outlook.

For the fourth quarter, Civitas reported adjusted earnings per share of $1.78, missing analyst expectations of $1.99. The company's revenue of $1.29 billion also fell short of the $1.30 billion consensus estimate, despite sequential increases in total sales volumes and oil production.

Looking ahead to 2025, Civitas plans to reduce capital investments by nearly 5% year-over-year to a range of $1.8 billion to $1.9 billion. The company expects to generate approximately $1.1 billion in free cash flow, assuming $70 per barrel WTI crude oil prices, representing a peer-leading free cash flow yield of 22%. However, the lower capital expenditure guidance may have disappointed investors anticipating higher production growth.

In an effort to maximize free cash flow amid market volatility, Civitas announced a 10% workforce reduction across all levels of the organization. The company also terminated its Chief Operating Officer, T. Hodge Walker, and Chief Transformation Officer, Jerome Kelly, without cause, potentially raising concerns about management stability or strategy shifts.

Despite the negatives, Civitas aims to prioritize debt reduction with the majority of its free cash flow after dividends, targeting year-end 2025 net debt below $4.5 billion. The company also plans to maintain its base quarterly dividend of $0.50 per share and expand its Permian Basin position through a $300 million bolt-on acquisition.