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A month has gone by since the last earnings report for Core Laboratories N.V. CLB. Shares have added about 5.3% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is CLB due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
First-Quarter 2018 Results
Core Laboratories reported first-quarter 2018 adjusted earnings of 57 cents per share, in line with the Zacks Consensus Estimate. This compares favorably with the prior-year quarter figure of 41 cents. The results were driven by improved performance of the Product Enhancement segment.
Total revenues of $170 million were marginally below the Zacks Consensus Estimate of $171 million. Revenues were up more than 8.5% from the prior-year quarter level of $156.6 million.
Reservoir Description: This segment’s revenues were $100.8 million compared with $104.9 million in first-quarter 2017.
Operating income for the segment was about $14.8 million in the quarter compared with $15.9 million in the prior-year quarter. Operating margin of the segment was 15%.
Production Enhancement: Segment revenues were approximately $69.2 million in the quarter compared with $51.7 million in first-quarter 2017. Increased demand for the company’s advanced technology solutions helped in generating higher revenues.
Operating income for the segment was about $17.7 million in the quarter compared with $7.7 million in the prior-year quarter, reflecting a surge of 128.1%. Operating margin of the segment was 26%. Improved utilization, and higher-technology services and products drove margins.
Balance Sheet & Free Cash Flow
As of Mar 31, 2018, Core Laboratories had cash and cash equivalents of $13.2 million and long-term debt (including lease obligations) of around $235.1 million. The debt-to-capitalization ratio of the company was 60.8%.
Capital expenditures in the first quarter were $4.4 million, reflecting a year-over-year decline of 31%.
The company generated free cash flow of approximately $18.6 million in the quarter under review.
For second-quarter 2018, Core Laboratories expects earnings to be around 64-68 cents per share. The company expects second-quarter revenues in the range of $177-179 million while operating income is expected to lie between $36.2 million and 37.2 million. The company expects operating margin to be more than 20% in second-quarter 2018.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Core Laboratories N.V. Price and Consensus
Core Laboratories N.V. Price and Consensus | Core Laboratories N.V. Quote
At this time, CLB has an average Growth Score of C, however its Momentum is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 more suitable for momentum investors than growth investors.
CLB has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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