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Core Labs (CLB) Stock Down 3% Since Q1 Earnings & Sales Beat

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Core Laboratories’ CLB stock has gone down 3% since the first-quarter 2022 earnings announcement on Apr 27.

The stock price slumped despite Core Labs’ first-quarter sales and revenues beating the consensus mark. The performance could be attributed to the poor outcome of the Production Enhancement unit and much increased year-over-year expenses.

Behind the Earnings Headlines

Core Labs reported first-quarter 2022 results, wherein adjusted earnings of 8 cents a share beat the Zacks Consensus Estimate of 6 cents. This is attributable to a year-over-year increase in revenues by 6%. However, the bottom line worsened from the year-ago quarter’s earnings of 15 cents per share. This downside is attributable to the year-over-year increase in expenses.

This oilfield service provider’s adjusted revenues of $115.3 million beat the Zacks Consensus Estimate of $112 million by about 2.9%. The top line also rose from the year-ago quarter’s revenues of $108.4 million.

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

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

Core Laboratories N.V. price-consensus-eps-surprise-chart | Core Laboratories N.V. Quote

Segmental Performance

Reservoir Description: Revenues decreased by about 2.3% to $74.8 million from $76.5 million in the first quarter of 2021 but narrowly beat the Zacks Consensus Estimate of $74 million. Moreover, the operating income fell from $10 million in the year-ago period to $361,000 and also missed the Zacks Consensus Estimate of $4.2 million due to the heavy impact of the Russia-Ukraine conflict, a greater-than-expected COVID-19 caseload and a typical seasonal decline in revenues. The segment’s operating margin of 0.5% was lower than the prior-year quarter’s 13.1%.

Production Enhancement: Revenues of $40.5 million compared favorably with $31.9 million in the first quarter a year earlier, which is a 27.1% increase year over year. The same lagged the Zacks Consensus Estimate of $43.47 million.

Moreover, the segmental operating loss of $918,000 in the quarter underperformed the Zacks Consensus Estimate of an operating profit $5.55 million. The year-ago period reported an operating income of $1.6 million. The weak numbers could be attributed to a decrease in international product sales, including the suspension of product sales in Ukraine.

Financials and Dividend

As of Mar 31, 2022, Core Labs had cash and cash equivalents worth $22 million and long-term debt of $188.6 million. The company’s debt-to-capitalization was 53.3%.

In the reported quarter, CLB generated $5.3 million of operating cash and its capital expenditure totaled $2.3 million. This, in turn, led to $3 million of free cash flow.

Core Labs’ board of directors approved a regular quarterly dividend of a cent per share on the company's common stock, payable on May 31, 2022 to all shareholders of record as of May 9, 2022.

2022 Outlook

For the second quarter of 2022, Core Labs’ revenues are anticipated in the $119-$125 million range, while the operating income is estimated in the $9.4-$11.8 million band.

Earnings per share for the second quarter of 2022 are expected between 12 cents and 16 cents.

As Core Labs’ prospects are directly associated with expanding its client activity and tapping new geographies, it continues to focus on the ongoing development of the new client-driven technologies and geographical exploration along with a deepened concentration on digitization and automation throughout its business.

Zacks Rank & Key Picks

Core Labs currently carries a Zacks Rank #4 (Sell). Some better-ranked players from the energy space that warrant a look include PDC Energy PDCE, PBF Energy PBF and Vista Oil & Gas VIST, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

PDC Energy’s stock has gone up 81.9% in a year. The Zacks Consensus Estimate for PDC Energy’s 2022 earnings has been revised about 22.1% upward over the past 60 days from $13.32 per share to $16.27.

The Zacks Consensus Estimate for PDCE’s 2022 earnings is pegged at $16.27 per share, up 103.6% from the projected year-ago earnings of $7.99.

The Zacks Consensus Estimate for PBF Energy’s 2022 earnings has been revised upward by about 221% over the past 60 days from $1.76 to $5.65 per share.

The Zacks Consensus Estimate for PBF Energy’s 2022 earnings is projected at $5.65 per share, up about 326% from the projected year-ago loss of $2.50. PBF stock has increased 89.1% in a year.

The Zacks Consensus Estimate for Vista’s 2022 earnings is projected at $1.67 per share, up about 209.3% from the projected year-ago earnings of 54 cents.

Vista’s stock has rallied 206.2% in a year. The Zacks Consensus Estimate for VIST’s 2022 earnings has been revised about 7.7% upward over the past 60 days from $1.55 per share to $1.67.


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