Core Laboratories (CLB) Q3 Earnings Top, Revenues Miss
Core Laboratories Inc. CLB 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.
Core Laboratories Inc. Price, Consensus and EPS Surprise
Core Laboratories Inc. price-consensus-eps-surprise-chart | Core Laboratories Inc. Quote
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.
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.
Zacks Rank and Key Picks
Currently, CLB carries a Zacks Rank #3 (Hold).
Investors interested in the energysector might look at some better-ranked stocks like CVR Energy, Inc. CVI, sporting a Zacks Rank #1 (Strong Buy), and USA Compression Partners, LP USAC and Delek US Holdings DK, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is valued at $3.37 billion. In the past year, its shares have lost 10.2%.
CVI currently pays a dividend of $2 per share or 5.96% on an annual basis. Its payout ratio currently sits at 30% of earnings.
USA Compression Partners is valued at around $2.48 billion. USAC currently pays a dividend of $2.10 per unit, or 8.31% on an annual basis.
USAC provides natural gas compression services and offers compression services to oil companies and independent producers, processors, gatherers, and transporters of natural gas and crude oil. It also operates stations.
Delek US Holdings is worth approximately $1.73 billion. DK currently pays a dividend of 94 cents per share, or 3.52% on an annual basis.
DK operates in the integrated downstream energy business in the United States. The company operates under three segments — refining, logistics and retail.
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