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California Resources’ Earnings Effectiveness: Chart in Focus

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California Resources’ retained earnings effectiveness

Per California Resources’ (CRC) 2Q16 balance sheet, its retained earnings fell by ~$140 million.  When divided by CRC’s 1Q16 stockholder equity of about -$952 million, this total results in retained earnings effectiveness of about -15%.

In other words, due to a net loss in 2Q16, a negative change in California Resources’ retained earnings impacted 1Q16 stockholders’ equity by about -15%.

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Other upstream players

In 2Q16, almost all S&P 500 (SPY) upstream companies—like Southwestern Energy (SWN), Devon Energy (DVN), and EOG Resources (EOG)—have reported negative changes to their retained earnings. This trend is mainly due to lower realized crude oil and natural gas prices and impairment of proved reserves.

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