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Why Is Core Laboratories (CLB) Down 6.8% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Core Laboratories N.V. (CLB - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
First-Quarter 2017 Results
Oilfield services company Core Laboratories N.V. reported first-quarter 2017 adjusted diluted earnings of $0.42 per share, surpassing the Zacks Consensus Estimate of $0.39. Further, this compares favorably with the prior-year quarter adjusted earnings of $0.37.
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.
Guidance
For the second quarter, Core Laboratories expects earnings to lie between $0.48–$0.52 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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an downward trend in fresh estimates. There has been one lower revision in the current quarter.
At this time, the stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable solely for growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Core Laboratories (CLB) Down 6.8% Since the Last Earnings Report?
A month has gone by since the last earnings report for Core Laboratories N.V. (CLB - Free Report) . Shares have lost about 6.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
First-Quarter 2017 Results
Oilfield services company Core Laboratories N.V. reported first-quarter 2017 adjusted diluted earnings of $0.42 per share, surpassing the Zacks Consensus Estimate of $0.39. Further, this compares favorably with the prior-year quarter adjusted earnings of $0.37.
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.
Guidance
For the second quarter, Core Laboratories expects earnings to lie between $0.48–$0.52 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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an downward trend in fresh estimates. There has been one lower revision in the current quarter.
Core Laboratories N.V. Price and Consensus
Core Laboratories N.V. Price and Consensus | Core Laboratories N.V. Quote
VGM Scores
At this time, the stock has a strong Growth Score of 'A', though it is lagging a lot on the momentum front with a 'D'. However, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is suitable solely for growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.