It has been about a month since the last earnings report for Core Laboratories (CLB Quick QuoteCLB - Free Report) . Shares have lost about 15.6% in that time frame, underperforming the S&P 500.

But investors have to be wondering, 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 latest earnings report in order to get a better handle on the important drivers.

Core Laboratories Q3 Earnings Surpass Estimates, Decline Y/Y

Core Laboratories reported third-quarter 2025 adjusted earnings of 22 cents per share, which beat the Zacks Consensus Estimate of 19 cents. This can be attributed to the outperformance of the Production Enhancement segment. However, the bottom line decreased from the year-ago quarter’s reported figure of 27 cents due to the underperformance of the Reservoir Description segment.

This oilfield service provider reported third-quarter operating revenues of $134.5 million, beating the Zacks Consensus Estimate of $128 million. This can be attributed to the increased demand for CLB’s laboratory analytical services and completion diagnostic services in international regions. Additionally, the top line remained flat year over year.

During the third quarter, the company repurchased 462,248shares of common stock for a total of $5 million. Additionally, CLB reduced its debt leverage ratio to 1.10 and net debt by $3.4 million.

During the third quarter of 2025, the company's leverage ratio (calculated as total net debt divided by trailing twelve months adjusted EBITDA) remained at the lowest level in nine years.

Segmental Performance

Reservoir Description: Revenues in this segment decreased 0.7% from the year-ago quarter to $88.2 million. However, the top line beat our estimation of $84 million, driven by increased demand for rock and fluid analysis across the company's global laboratory network.

Operating income decreased from $15.5 million in the year-ago period to $11.6 million and missed our estimate of $11.7 million.

Production Enhancement: This segment’s revenues increased 1.6% to $46.3 million from $45.6 million in the prior-year quarter. Moreover, the top line beat our estimate of $43.5 million.

Operating income increased from $2.6 million in the year-ago period to $4.9 million. Moreover, the operating income from this segment beat our estimate of $3.3 million. The outperformance in the Production Enhancement segment can be attributed to the increased international product sales and continued strong demand for proprietary completion diagnostic services.

Costs & Expenses

CLB reported total costs and expenses of $113.6 million in the third quarter, decreasing by 0.9% from the year-ago quarter’s level of $114.6 million. Our estimation for the metric was $113.5 million.

Details of Financials & Dividends

As of Sept. 30, 2025, the company had cash and cash equivalents of $25.6 million and long-term debt of $114.1 million. CLB’s debt-to-capitalization was 29.1%.

Net cash provided by operating activities in the third quarter totaled $8.5 million, while capital expenditure amounted to $2 million. This led to a positive free cash flow of $6.5 million.

Core Laboratories’ board of directors approved a quarterly dividend of 1 cent per share to its common shareholders of record as of Nov. 3, 2025. The payout, which remains unchanged from the previous quarter, will be made on Nov. 24.

Management Remarks & Outlook

In the short term, potential tariff pressures and OPEC+’s decision to raise production levels are driving increased market volatility and softer commodity prices. However, the long-term fundamentals of global crude oil demand remain solid. Core Laboratories retains a positive multi-year outlook and continues to experience consistent activity across ongoing long-cycle developments, particularly in deepwater regions along the South Atlantic Margin, North and West Africa, Norway, the Middle East and select Asia Pacific areas. The company’s revenue potential from these awarded projects will continue to hinge on the geological success rates achieved by its clients.

For the fourth quarter of 2025, CLB expects revenues to range from $132 million to $136 million. Operating income is anticipated to be between $14 million and $16.1 million, with earnings per share expected to be between 18 cents and 22 cents.

Revenues for the Reservoir Description segment are anticipated to be between $88 million and $90 million, with operating income ranging from $11 million to $12.3 million.

Revenues for the Production Enhancement segment are expected to be between $44 million and $46 million, with operating income predicted to be between $2.9 million and $3.7 million.

The company anticipates an effective tax rate of 25% for the fourth quarter. Its guidance for the fourth quarter of 2025 is based on estimations for underlying operations and excludes any gains or losses from foreign exchange.

The IEA, EIA and OPEC+ project global crude oil demand to rise by 0.7-1.3 million barrels per day in 2025, with similar growth expected in 2026, led by non-OECD markets in Asia, India, the Middle East and Africa. The IEA’s September 2025 report highlights that accelerating decline rates in existing oil fields pose a growing long-term supply risk, underscoring the need for sustained investment in new developments to preserve energy security. Core Laboratories’ Reservoir Description and Production Enhancement services are well-positioned to support these ongoing investment needs.

Smaller, short-cycle crude oil projects are expected to remain highly sensitive to price fluctuations, with U.S. onshore drilling and completion activity reacting most immediately to market changes. Ongoing geopolitical tensions, tariff shifts and price volatility are also adding uncertainty to demand for laboratory services linked to the global oil trade.

Core Laboratories anticipates minimal impact from potential tariffs as over 75% of its revenues come from non-tariffed services. Most product sales — less than 25% of total revenues — are U.S.-made, with about half consumed domestically. The company continues to mitigate the limited effects of tariffs on imported raw materials used in its U.S. operations.

Key Projects & Technology Advancements

During the third quarter of 2025, client meetings across Asia-Pacific confirmed Core Laboratories’ participation in several major exploration and development projects spanning both conventional and unconventional plays. On Oct. 1, 2025, the company acquired Brazil-based Solintec, enhancing its geological service capabilities and strengthening its presence along the South Atlantic Margin. The Solintec acquisition aligns well with CLB's growth strategy and is expected to be immediately accretive to future earnings and return on invested capital.

During the same period, Core Laboratories strengthened its leadership in geological and reservoir analysis through multi-client studies in Brazil and West Africa, providing vital data to reduce deepwater exploration risks. Strong industry interest underscores rising demand for the company’s expertise, while a proprietary geomechanical study in Brazil further aided clients in optimizing drilling plans.

Core Laboratories also supported a major international operator in Norway with a complex deepwater plug and abandonment project. To isolate the wellbore, it deployed its proprietary HELIOS™ gun system, featuring ultra-high shot density and 360-degree annular coverage. The system optimized perforation flow, reduced tortuosity and improved perf-wash efficiency. The operator confirmed HELIOS™ delivered a faster, more cost-effective solution with enhanced plug integrity and operational reliability.

A Middle Eastern National Oil Company engaged Core Laboratories to assess individual stage production in a key step-out well. Using its FLOWPROFILER™ Engineered Delivery System oil tracer technology, CLB successfully mapped production across eleven stages, offering detailed insight into well performance where other methods had failed.

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

Currently, Core Laboratories has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a score 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 C. 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.