Civitas Resources' stock slumped 6.65% in pre-market trading on Tuesday, following the company's mixed fourth-quarter 2024 results and underwhelming 2025 guidance.
For the quarter ended December 31, 2024, Civitas reported adjusted earnings per share of $1.78, falling short of analysts' expectations of $1.98. The company's revenue of $1.29 billion also missed the consensus estimate of $1.30 billion, 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, potentially disappointing investors anticipating higher production growth. The company aims 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, Civitas announced a 10% workforce reduction across all levels of the organization, as well as the termination of its Chief Operating Officer and Chief Transformation Officer, raising concerns about management stability and strategy shifts.
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