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Core Laboratories (CLB) Tops Earnings and Revenues in Q1

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Oilfield services company Core Laboratories N.V. (CLB - Free Report) reported first-quarter 2017 adjusted diluted earnings of 42 cents per share, surpassing the Zacks Consensus Estimate of 39 cents. Further, this compares favorably with the prior-year quarter adjusted earnings of 37 cents.

The better-than-expected results were primarily driven by an improvement in the top line, especially in the product enhancement operations.

Total revenue of $158 million surpassed the Zacks Consensus Estimate of $150 million by 5.25%. Further it was up 2.6% compared to the prior-year quarter level of $154 million.

Segment Performance

In an effort to streamline the company’s business models, Core Laboratories exited from the reservoir management segment. It currently operates in just two segments – Reservoir Description and Production Enhancement.

Reservoir Description: Segment revenues were $104.9 million compared with $107.4 million in first-quarter 2016. Lower activity levels in the international and offshore markets affected results negatively.

Operating income (excluding foreign exchange losses) for the segment was about $15.9 million in the reported quarter compared with $18.6 million in the prior-year quarter. Operating margin for the reported quarter was around 17%.

Production Enhancement: Segment revenues were approximately $52.9 million in the reported quarter as against $46.2 million in first-quarter 2016. Increased U.S. land activity levels helped in generating better revenues.

Operating income (excluding foreign exchange losses) for the segment was about $7.3 million in the reported quarter compared with $4.2 million in the prior-year quarter, reflecting 74% increase. Usage of technologically advanced products and enhancement of their stimulation programs contributed to increased margins.

Balance Sheet and Free Cash Flow

As of Mar 31, 2017, Core Laboratories had cash and cash equivalents of $14.3 million. Capital Expenditures for the fourth quarter were $6.4 million.

The company generated free cash flow of approximately $23.3 million in first-quarter 2017.

Quarterly Dividend

On Apr 18, 2017, the company’s board of directors announced to pay a cash dividend of 55 cents per share. Notably, this is same as the previous payout. The dividend will be paid on May 23 to shareholders on record as of Apr 28.

Guidance

For the second quarter, Core Laboratories expects earnings to lie between 48–52 cents per share. The company expects first-quarter revenues to lie between $165 -$170 million. The company expects its revenue and income to increase on the back of the improvement in the international and offshore markets with additional major capital project announcements.

Core Laboratories N.V. Price, Consensus and EPS Surprise

 

Core Laboratories N.V. Price, Consensus and EPS Surprise | Core Laboratories N.V. Quote

Zacks Rank & Key Picks

Amsterdam, Netherlands-based Core Laboratories is an oilfield services company that provides reservoir description and production enhancement services to the oil and gas industry across the globe. The company currently carries a Zacks Rank #4 (Strong Sell).

Better-ranked players in the broader industry include Penn Virginia Corporation (PVAC - Free Report) , Bellatrix Exploration Ltd (BXE - Free Report) and Cenovus Energy Inc. (CVE - Free Report) . All the three companies sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Penn Virginia posted a positive average surprise of 36.67% in the last four quarters.

Bellatrix posted a positive average surprise of 58.54% in the last four quarters.

Cenovus posted a positive average surprise of 74.89% in the last four quarters.

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