CIVITAS RESOURCES INC (NYSE:CIVI) Reports Mixed Q3 2025 Results with Strong Earnings Beat and Slight Revenue Miss

Civitas Resources Inc (NYSE:CIVI) reported third quarter 2025 financial results that presented a mixed picture for investors, with earnings surpassing expectations while revenue fell slightly short of analyst forecasts. The company's performance demonstrates operational strength amid challenging market conditions, though the market's immediate reaction reflected some investor caution.

Earnings and Revenue Performance

Civitas delivered strong bottom-line results for the third quarter, significantly exceeding analyst expectations for profitability. The company reported adjusted earnings per share of $1.93, comfortably ahead of the $1.34 consensus estimate. This represents a substantial beat of approximately 44% compared to analyst projections.

However, the company's top-line results told a different story. Third quarter revenue came in at $1.17 billion, slightly below the analyst estimate of $1.20 billion. This revenue miss of approximately 2% suggests that while the company maintained strong profitability through cost controls and operational efficiencies, it faced some headwinds in achieving full revenue potential.

Key financial highlights from the quarter include:

• Net income of $177 million
• Operating cash flow of $860 million
• Adjusted EBITDAX of $855 million
• Adjusted free cash flow of $254 million

Market Reaction and Price Action

The market response to Civitas's earnings release has been cautiously positive in after-hours trading, with shares rising approximately 2.5%. This moderate gain suggests investors are weighing the strong earnings beat against the slight revenue miss and the company's recent decision to discontinue guidance due to its pending merger with SM Energy.

Recent performance metrics show:

• After-market performance: +2.47%
• Last week performance: -8.25%
• Last two weeks performance: -9.61%
• Last month performance: -20.01%

The positive after-hours movement indicates some relief among investors following recent significant declines, though the broader negative trend over recent weeks reflects ongoing market concerns about the energy sector and the pending merger.

Operational Highlights and Strategic Developments

Civitas demonstrated robust operational performance across its key basins during the third quarter. Total production increased 6% from the second quarter to 336 thousand barrels of oil equivalent per day, while oil volumes specifically grew to 158 thousand barrels per day. The company achieved these production gains while reducing cash operating expenses by 5% to $9.67 per barrel of oil equivalent.

Notable operational achievements include:

• Permian Basin production increased 6% to 181 MBoe/d
• DJ Basin production rose 6% to 155 MBoe/d
• Successfully closed divestment of two non-core DJ Basin assets
• Reduced net debt by $237 million while repurchasing $250 million of stock

The company also announced the cancellation of its third quarter earnings webcast and conference call due to its recently announced merger with SM Energy Company. This strategic combination represents a significant development that likely influenced the company's decision to discontinue providing quarterly and annual guidance.

Capital Return and Financial Position

Civitas maintained its commitment to shareholder returns, with the board approving a quarterly dividend of $0.50 per share payable in December 2025. The company's aggressive share repurchase program continued during the quarter, with $250 million of stock repurchased representing approximately 8% of outstanding shares. Year-to-date, the company has repurchased nearly 10% of its outstanding shares.

The company ended the quarter with strong financial liquidity of $2.2 billion, comprising cash on hand and available credit facility capacity. This robust financial position provides flexibility as the company navigates the pending merger with SM Energy.

Forward Outlook and Analyst Expectations

Looking ahead, analysts project full-year 2025 revenue of $4.70 billion and fourth quarter 2025 revenue of $1.14 billion. For the upcoming quarter, analysts estimate revenue of $1.42 billion. These projections will need to be reassessed in light of the company's discontinued guidance and the pending merger's potential impact on future operations.

For more detailed earnings information and analyst estimates, visit the Civitas Resources earnings and estimates page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or recommendation to buy or sell any securities. Investors should conduct their own research and consult with financial advisors before making investment decisions.