Breaking Down Berry Corporation (BRY) Financial Health: Key Insights for Investors

Are you keeping a close watch on the energy sector and wondering about the financial stability of Berry Corporation (BRY)? Did you know that in 2024, Berry Corporation reported a net income of $19 million, or $0.25 per diluted share, with an adjusted net income of $52 million, or $0.68 per diluted share? The company generated an operating cash flow of $210 million and free cash flow of $108 million. With production at 25.4 MBoe/d (93% oil) and lease operating expenses reduced by 12% year-over-year, is Berry Corporation a financially sound investment? Dive in to uncover key insights into Berry Corporation's financial health, production strategies, and future outlook.

Berry Corporation (BRY) Revenue Analysis

Berry Corporation (BRY) operates as an independent upstream energy company focused on developing and producing conventional oil reserves in the western United States. Understanding the composition and trends in its revenue streams is crucial for investors.

Here’s a breakdown of Berry Corporation's revenue analysis:

Primary Revenue Sources:

• Berry Corporation (BRY) generates revenue primarily from the sale of crude oil.
• A smaller portion of their revenue comes from the sale of natural gas and natural gas liquids (NGLs).
• The company’s operations are geographically focused in California and Utah.

Year-over-Year Revenue Growth:

Analyzing Berry Corporation's year-over-year revenue growth provides insights into its performance and market dynamics. For instance, the company's total revenues for the year ended December 31, 2023, were $641.444 million, compared to $752.595 million for the year ended December 31, 2022. This represents a 14.76% decrease.

Revenue Trends:

A review of recent financial data highlights fluctuations in Berry Corporation’s revenue. The decrease in revenue from 2022 to 2023 can be attributed to several factors, including lower realized oil prices and reduced production volumes. Investors should monitor these trends to understand the company's ability to adapt to changing market conditions.

Contribution of Business Segments:

Given Berry Corporation’s focus on crude oil production, the majority of its revenue is derived from this segment. The contributions from natural gas and NGLs are relatively smaller but still important to the overall revenue mix. Changes in the production volumes and pricing of each commodity can significantly impact the company’s financial performance.

The following table summarizes Berry Corporation's revenue streams based on recent financial data:

Analysis of Significant Changes:

The 14.76% decrease in total revenues from 2022 to 2023 is a significant change that warrants further analysis. Factors contributing to this decline may include:

• Decline in Crude Oil Prices: Lower average selling prices for crude oil in 2023 compared to 2022 directly impacted revenue.
• Production Volumes: Any decrease in production volumes due to operational issues, maintenance, or natural decline in well productivity would reduce sales.
• Market Conditions: Changes in overall market demand and supply dynamics can influence pricing and sales volumes.

Understanding these factors is essential for investors to assess the sustainability of Berry Corporation’s revenue streams and its ability to generate future growth. For more insights into the company and its investors, check out: Exploring Berry Corporation (BRY) Investor Profile: Who’s Buying and Why?

Berry Corporation (BRY) Profitability Metrics

Analyzing Berry Corporation's profitability involves examining several key metrics to understand its financial health. For the full year 2024, Berry Corporation reported a net income of $19 million, or $0.25 per diluted share, and an adjusted net income of $52 million, or $0.68 per diluted share.

Here's a breakdown of Berry Corporation's profitability metrics:

• Gross Profit Margin: While specific gross profit margin for 2024 isn't directly available in the search results, analyst estimates suggest a gross margin of 48.47%.
• Operating Profit Margin: The EBIT margin, which indicates the percentage of sales remaining as operating profit, is estimated to be 8.49% for 2024.
• Net Profit Margin: Berry Corporation's net profit margin for 2024 is reported as 2.5%. However, another source estimates a profit margin of 6.18% for the same period.

To provide a clearer picture, here's a table summarizing these metrics:

Analyzing Berry Corporation's operational efficiency reveals the following:

• Cost Management: Berry successfully reduced its lease operating expenses (LOE) by 12% year-over-year.
• G&A Expenses: The company lowered its general and administrative (G&A) expenses compared to 2023, including a 6% reduction in adjusted G&A.
• Methane Emissions: Berry achieved a significant reduction in methane emissions, exceeding 80%.

Berry Corporation's financial results for 2024 demonstrate a mixed performance. While the company reported a net income of $19 million for the year, it experienced a net loss of $2 million in the fourth quarter. Despite this, Berry managed to maintain a steady production rate and declared a quarterly cash dividend of $0.03 per share.

Additional key financial metrics for 2024 include:

• Operating cash flow of $210 million
• Adjusted EBITDA of $292 million
• Free cash flow of $108 million

These metrics, along with successful cost management and emission reductions, highlight Berry Corporation's focus on enhancing cash flows and sustaining production. For more detailed insights, you can explore Breaking Down Berry Corporation (BRY) Financial Health: Key Insights for Investors.

Berry Corporation (BRY) Debt vs. Equity Structure

Understanding Berry Corporation (BRY)'s financial structure involves analyzing its debt and equity mix. This reveals how the company funds its operations and growth. A balanced approach is crucial for long-term financial health.

As of the fiscal year 2024:

• Berry Corporation (BRY) had a total debt of $627.7 million.
• The company's total equity stood at $447.9 million.

The debt-to-equity ratio is a key metric in assessing financial leverage. Berry Corporation (BRY)'s debt-to-equity ratio can be calculated as follows:

Debt-to-Equity Ratio = Total Debt / Total Equity = $627.7 million / $447.9 million = 1.40

A debt-to-equity ratio of 1.40 indicates that Berry Corporation (BRY) has $1.40 of debt for every $1 of equity. Whether this ratio is high or low depends on industry standards and the company's specific circumstances. Compared to other companies in the oil and gas industry, this ratio should be benchmarked against peers to determine if Berry Corporation (BRY) is more or less leveraged.

Recent activities, such as debt issuances or refinancing, provide insights into Berry Corporation (BRY)'s financial management. Investors should monitor these activities to understand how the company is optimizing its capital structure.

Balancing debt and equity is vital. Too much debt can increase financial risk, while too little debt might indicate missed opportunities for growth. Berry Corporation (BRY)'s approach to this balance reflects its financial strategy and risk tolerance. For related information, see: Mission Statement, Vision, & Core Values of Berry Corporation (BRY).

Here is a summary of Berry Corporation (BRY)'s capital structure:

Analyzing these figures helps stakeholders understand Berry Corporation (BRY)'s financial positioning and its ability to manage its financial obligations while pursuing growth opportunities.

Berry Corporation (BRY) Liquidity and Solvency

When evaluating Berry Corporation's financial health, understanding its liquidity and solvency is crucial for investors. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. Analyzing key financial ratios and statements provides insights into Berry Corporation's financial stability.

Assessing Berry Corporation's Liquidity:

Analyzing Berry Corporation's liquidity involves examining its current and quick ratios, working capital trends, and cash flow statements.

• Current and Quick Ratios: These ratios provide a snapshot of Berry Corporation's ability to cover its short-term liabilities with its short-term assets.
  • The current ratio is calculated by dividing current assets by current liabilities.
  • The quick ratio, also known as the acid-test ratio, is calculated by dividing (current assets - inventory) by current liabilities.
• Working Capital Trends: Monitoring the trend of Berry Corporation's working capital (current assets - current liabilities) helps assess its operational efficiency and short-term financial health.
• Cash Flow Statements Overview: Analyzing cash flow statements reveals how Berry Corporation generates and uses cash. It's important to look at trends in operating, investing, and financing cash flows.

Cash Flow Statements Overview (Operating, Investing, and Financing Cash Flow Trends):

An overview of Berry Corporation's cash flow statements is essential to understanding the company's financial activities.

• Operating Cash Flow: This indicates the cash generated from Berry Corporation's core business operations. A positive and growing operating cash flow is generally a good sign.
• Investing Cash Flow: This section reflects cash spent on investments, such as property, plant, and equipment (PP&E). Significant capital expenditures can impact this.
• Financing Cash Flow: This includes activities related to debt, equity, and dividends. It shows how Berry Corporation is funding its operations and returning value to shareholders.

Potential liquidity concerns might arise if Berry Corporation has a declining current ratio, negative working capital, or negative operating cash flow. Conversely, a strong current ratio, positive working capital, and positive operating cash flow would indicate liquidity strengths.

Here is an example of how key financial data can be presented to assess a company's financial health:

To gain more insights into Berry Corporation and its investors, consider reading: Exploring Berry Corporation (BRY) Investor Profile: Who’s Buying and Why?

Berry Corporation (BRY) Valuation Analysis

Determining whether Berry Corporation (BRY) is overvalued or undervalued requires a look at several key financial metrics and market indicators. These include relative valuation ratios, stock price performance, dividend information, and analyst ratings.

To assess Berry Corporation's (BRY) valuation, we can examine the following ratios:

• Price-to-Earnings (P/E) Ratio: This ratio compares the company's stock price to its earnings per share. A lower P/E ratio might suggest undervaluation compared to peers, while a higher P/E ratio could indicate overvaluation or higher growth expectations.
• Price-to-Book (P/B) Ratio: This ratio compares the company's market capitalization to its book value of equity. A P/B ratio below 1.0 might suggest the stock is undervalued.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares the company's enterprise value (market cap plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization. It’s useful for comparing companies with different capital structures. A lower EV/EBITDA multiple could indicate undervaluation.

Analyzing stock price trends provides insights into market sentiment and investor confidence. Recent stock performance can be telling:

• 12-Month Stock Price Trend: Reviewing the stock's performance over the past year helps to understand its volatility and overall direction. A consistently upward trend may reflect positive market sentiment, while a downward trend could indicate concerns about the company's prospects.

If applicable, dividend yield and payout ratios offer additional insight:

• Dividend Yield: The dividend yield is the annual dividend payment divided by the stock price. A higher dividend yield can make the stock attractive to income-seeking investors.
• Payout Ratio: The payout ratio is the percentage of earnings paid out as dividends. A sustainable payout ratio indicates the company can comfortably afford its dividend payments.

Here is a sample table illustrating how these valuation metrics might look (note: real-time data should be acquired from financial data providers):

Finally, it's important to consider analyst ratings:

• Analyst Consensus: Check the consensus among analysts covering the stock (e.g., buy, hold, or sell ratings). A strong buy consensus suggests analysts believe the stock is undervalued, while a sell consensus indicates the opposite.

For more insights, check out: Breaking Down Berry Corporation (BRY) Financial Health: Key Insights for Investors

Berry Corporation (BRY) Risk Factors

Berry Corporation (BRY) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and financial challenges.

Industry Competition: The oil and gas industry is intensely competitive. Berry Corporation competes with a large number of companies, many of which possess substantially greater financial and technical resources. Increased competition could lead to lower prices for Berry's products, reduced production volumes, and decreased profitability.

Regulatory Changes: The oil and gas industry is subject to extensive regulation at the federal, state, and local levels. These regulations cover a wide range of issues, including environmental protection, health and safety, and taxation. Changes in these regulations could increase Berry Corporation's costs of compliance, limit its ability to develop new projects, and reduce its profitability.

Market Conditions: Berry Corporation's financial performance is heavily influenced by market conditions, particularly the prices of oil and natural gas. These prices are subject to significant volatility due to factors such as global supply and demand, geopolitical events, and economic conditions. Declines in oil and gas prices could reduce Berry Corporation's revenues, profitability, and cash flow.

Operational Risks: Oil and gas operations are inherently risky, involving activities such as drilling, production, and transportation. These activities are subject to a variety of hazards, including equipment failures, accidents, and natural disasters. Such events could result in production disruptions, property damage, personal injury, and environmental damage, leading to financial losses and liabilities for Berry Corporation.

Financial Risks: Berry Corporation faces several financial risks, including:

• Liquidity Risk: The risk that Berry Corporation may not be able to meet its financial obligations as they come due.
• Credit Risk: The risk that Berry Corporation's customers or counterparties may default on their obligations.
• Interest Rate Risk: The risk that changes in interest rates could increase Berry Corporation's borrowing costs.
• Commodity Price Risk: The risk that changes in oil and gas prices could negatively impact Berry Corporation's revenues and profitability.

Strategic Risks: Strategic risks include:

• Acquisition and Integration Risks: Berry Corporation's growth strategy involves acquisitions, which carry the risk of overpaying for assets or failing to successfully integrate acquired businesses.
• Reserve Estimates: Berry Corporation's reserve estimates are based on engineering estimates and assumptions, which may prove to be inaccurate.

Mitigation strategies are often detailed in the company's annual reports and SEC filings, including measures to manage commodity price risk through hedging, maintain insurance coverage, and implement safety programs.

For more in-depth analysis, consider reading: Breaking Down Berry Corporation (BRY) Financial Health: Key Insights for Investors

Berry Corporation (BRY) Growth Opportunities

Berry Corporation (BRY) is strategically positioned as an independent upstream energy company focused on onshore, low geologic risk, long-lived oil and gas reserves primarily in California and Utah Exploring Berry Corporation (BRY) Investor Profile: Who’s Buying and Why?. The company's future growth prospects are influenced by several key drivers, strategic initiatives, and competitive advantages.

Analysis of Key Growth Drivers:

• Product Innovations: Berry Corporation focuses on enhanced oil recovery techniques, including waterflood and steam injection processes, to maximize production efficiency in mature oil fields. The company committed $45 million to enhanced oil recovery (EOR) techniques in Kern County during 2023-2024.
• Market Expansions: Berry has strategically expanded its operations in the Uinta Basin of Utah, where it sees significant long-term value potential. Approximately 40% of Berry's 2025 capital will be directed to Utah operations, up from 25% in 2024. The company operates about 1,200 wells from five different reservoirs across its 100,000-acre footprint in Utah.
• Acquisitions: Berry Corporation has a history of strategic acquisitions. In 2023, Berry completed the acquisition of Macpherson Energy Corporation for $70 million, adding approximately 2,400 boe/d (100% oil) in 2024.

Future Revenue Growth Projections and Earnings Estimates:

Berry Corporation's financial results for 2024 show a mixed performance with a net income of $19 million, or $0.25 per diluted share, and an adjusted net income of $52 million, or $0.68 per diluted share. The company generated an operating cash flow of $210 million, adjusted EBITDA of $292 million, and free cash flow of $108 million. For the quarter ended December 2024, Berry reported revenues of $167.06 million, surpassing the Zacks Consensus Estimate by 7.78%. The consensus EPS forecast for the quarter ending in March 2025 is $0.14.

Analysts have provided revenue and EPS forecasts for Berry Corporation:

Strategic Initiatives and Partnerships:

• Debt Refinancing: Berry successfully completed refinancing transactions in December 2024, providing capital and liquidity to continue progressing its corporate strategy. A new $545 million term loan facility was established to redeem all its 2026 promissory notes and refinance its current RBL.
• Hedging: Berry utilizes hedges to manage commodity price risk. As of January 31, 2025, Berry has 75% of its estimated oil production volumes hedged for 2025 at an average strike price of $74.24 per barrel of Brent.
• Partnerships: Berry Corporation has strategic partnerships with key exploration companies. These include joint ventures with Chevron Corporation in the Midway-Sunset Field and Lario Petroleum in the San Joaquin Basin.

Competitive Advantages:

• Low Geologic Risk: Berry focuses on onshore assets in mature basins with predictable geology, which lowers exploration risks.
• Long-Lived Reserves: The company's assets have low decline rates, providing a competitive advantage compared to other basins.
• Operational Efficiency: Berry maintains low-cost operations, with operational costs of approximately $15.50 per barrel, significantly lower than the industry average.
• Strategic Locations: Berry's assets are located in the San Joaquin Basin in California and the Uinta Basin in Utah, which offer a blend of high oil content and natural gas.
• Technological Expertise: Berry demonstrates expertise in advanced recovery methods, such as waterflood techniques, steam injection processes, and advanced reservoir management strategies.

Berry Corporation's management remains optimistic about the future, emphasizing their strategy of generating sustainable free cash flow and improving capital efficiency. The company is actively exploring opportunities for scale and diversification, aiming to enhance cash flows and sustain production while strengthening its balance sheet. In 2025, Berry projects production of 24.8-26.0 MBoe/d with a capital program of $110-120 million.