It has been about a month since the last earnings report for Core Laboratories (CLB Quick QuoteCLB - Free Report) . Shares have lost about 16.7% in that time frame, underperforming the S&P 500.

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

Core Laboratories Q3 Earnings Top, Revenues Miss

Core Laboratories reported third-quarter 2023 adjusted earnings of 22 cents per share, which beat the Zacks Consensus Estimate of 18 cents. The bottom line also improved from the year-ago quarter’s reported figure of 18 cents. This could be attributed to improved performance at the Reservoir Description segment.

However, this oilfield service provider’s revenues of $125.3 million missed the Zacks Consensus Estimate of $129 million due to underperformance at the Production Enhancement segment. The top line, however, declined 0.6% from the year-ago quarter’s level of $126 million.

Segmental Performance

Reservoir Description: Revenues at this segment increased about 7.7% to $85.1 million from $79 million in the third quarter of 2022. The top line missed our projection of $85.2 million. Operating income increased from $9.8 million in the year-ago period to $13 million and also beat our estimate of $8.1 million. This was due to increased client activity across CLB's global network, as well as increased demand for analytical datasets from CLB's proprietary geological and petrophysical studies library.

Production Enhancement: This segment’s revenues decreased 14.5% to $40.2 million from $47 million in the prior year quarter. The same lagged our estimate of $44 million. Operating income of $1.5 million missed our projection of $4.2 million due to a decrease in U.S. onshore well completion activity. The figure also deteriorated from the year-ago quarter’s level of $4.4 million.

Financials and Dividends

As of Sep 30, 2023, Core Laboratories had cash and cash equivalents of $16.6 million and long-term debt of $177.9 million. The company’s debt-to-capitalization was 43.7%.

Operating cash totaled $5.4 million while capital expenditure amounted to $3.5 million.

CLB’s board of directors approved a regular quarterly dividend of a cent per share on the company's common stock, payable on Dec 4, 2023, to all shareholders of record as of Nov 13, 2023.

2023 Outlook

For the fourth quarter of 2023, revenues are anticipated in the range of $125-$132 million. Operating income is estimated in the $13.8-$17.3 million band.  EPS is expected between 17 cents and 23 cents. The company anticipates a 20% tax rate for the same time frame.

Reservoir Description revenue is expected to be in the range of $84-$86 million for the fourth quarter of 2023, with an operating income of $11.6-$13.3 million. Production Enhancement revenue is estimated to be in the band of $41-$46 million during the same time frame, with an operating income of $2.2-$4 million.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

At this time, Core Laboratories has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

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

Outlook

Core Laboratories has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.