It has been about a month since the last earnings report for California Resources Corporation (CRC Quick QuoteCRC - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is California Resources due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

California Resources Q1 Earnings Beat on Strong Oil Prices

California Resources Corporation (CRC Quick QuoteCRC - Free Report) posted first-quarter 2026 adjusted earnings of 88 cents per share, down 17.8% year over year but ahead of the Zacks Consensus Estimate by 6%. Total operating revenues before net commodity-derivative impacts were $967 million, up 6% year over year and ahead of the consensus mark by 7.2%.

Results reflected CRC’s oil-weighted production base and strong realizations. Net production averaged 154 thousand barrels of oil equivalent per day (MBoe/d), with oil representing 81% of volumes.

CRC's Derivative Loss Masks Underlying Profit

On a GAAP basis, CRC reported a net loss of $711 million, primarily tied to a non-cash loss in the fair value of outstanding commodity derivatives. That swing in mark-to-market results dominated the income statement even as operating performance tracked well with management’s expectations.

Excluding those unusual and non-cash items, CRC generated adjusted net income of $79 million. Adjusted EBITDAX came in at $304 million, underscoring the company’s ability to translate a firmer Brent backdrop into stronger core cash earnings.

California Resources' Pricing Strength Supports Quarter

California Resources continued to benefit from favorable oil pricing during the quarter. The company’s average realized oil price was $74.53 per barrel before the impact of hedging, closely tracking Brent crude prices. After including hedging impacts, the realized price came to $69.37 per barrel.

Pricing for other products also remained healthy. The company received nearly $45 per barrel for natural gas liquids, while natural gas prices averaged $3.56 per Mcf. These results were supported by CRC’s regional market exposure and pricing strategy.

CRC's Cost Base Reflects Timing Items and Operating Mix

California Resources reported total operating costs of $365 million for the quarter. Administrative expenses came in higher than expected at $106 million, mainly due to legal-related costs and increased employee compensation linked to the company’s rising share price.

Other expenses also affected quarterly results. Taxes excluding income taxes totaled $67 million, while transportation expenses were $26 million. Other operating expenses, after adjusting for related revenues, came to $44 million. At the same time, the company benefited from some additional income sources, including $18 million from commodity marketing activities and $6 million from electricity-related operations.

California Resources' Resilient Cash Flow and Balance Sheet

California Resources continued to generate healthy cash flow during the quarter, even as spending increased to prepare for higher activity later in the year. The company generated $247 million in operating cash flow before working-capital changes, while free cash flow came in at $116 million. Total capital spending was $131 million, mainly related to drilling, well maintenance and facility upgrades to support future production growth.

The company also strengthened its balance sheet by refinancing part of its debt. CRC issued $350 million in new long-term notes and used the proceeds to repay higher-interest debt due earlier. It ended the quarter with solid liquidity of about $1.3 billion and maintained a relatively low debt level compared to earnings, with a net leverage of 1.1X on a last-12-month adjusted EBITDAX basis.

CRC Raises 2026 Targets on Activity Ramp and Synergies

California Resources increased its full-year forecast as it plans to ramp up drilling activity in the second half of 2026. The company expects to operate seven drilling rigs later this year, including six in California and one in Utah. CRC also expects production to gradually rise through the year, ending 2026 at around 175 MBoe/d.

The company raised guidance for several important financial measures. CRC now expects stronger production, higher earnings and increased investment spending in 2026. It also increased its expected cost savings from the Berry merger to $90-$100 million annually. At the same time, ongoing efficiency improvements and consolidation of operations are helping reduce certain infrastructure-related spending.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in estimates review.

The consensus estimate has shifted 20.91% due to these changes.

VGM Scores

Currently, California Resources has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock has a grade of B on the value side, putting it in the top 40% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, California Resources has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

California Resources is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Diamondback Energy (FANG Quick QuoteFANG - Free Report) , a stock from the same industry, has gained 8%. The company reported its results for the quarter ended March 2026 more than a month ago.

Diamondback reported revenues of $4.24 billion in the last reported quarter, representing a year-over-year change of +4.7%. EPS of $4.23 for the same period compares with $4.54 a year ago.

For the current quarter, Diamondback is expected to post earnings of $5.67 per share, indicating a change of +112.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +10.9% over the last 30 days.

Diamondback has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.