How Does California Resources Corporation’s (NYSE:CRC) EPS Growth Stack Up Against Industry Performance?
When California Resources Corporation (NYSE:CRC) released its most recent earnings update (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well California Resources has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see CRC has performed. View our latest analysis for California Resources
How Did CRC’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to analyze different stocks in a uniform manner using the latest information. For California Resources, the latest earnings -$204.0M, which compared to last year’s figure, has become less negative. Given that these values are relatively short-term, I’ve created an annualized five-year value for CRC’s earnings, which stands at -$841.2M. This shows that, although net income is negative, it has become less negative over the years.
Additionally, we can analyze California Resources’s loss by looking at what’s going on in the industry on top of within the company. Firstly, I want to briefly look into the line items. Revenue growth over past few years has been negative at -19.53%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Eyeballing growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 13.67% in the prior year, . This is a change from a volatile drop of -7.47% in the previous few years. This suggests that, despite the fact that California Resources is currently unprofitable, it may have only just gained from the recent industry expansion, moving earnings into a more favorable position.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most valuable step is to examine company-specific issues California Resources may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research California Resources to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for CRC’s future growth? Take a look at our free research report of analyst consensus for CRC’s outlook.
2. Financial Health: Is CRC’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
