Core Laboratories (CLB) Q1 Earnings Meet Estimates, Up Y/Y

Core Laboratories N.V. (NYSE:CLB) 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.

Segment Performance

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.

Quarterly Dividend

On Apr 17, the board of directors announced a cash dividend of 55 cents per share. Notably, this is same as the previous payout. The dividend will be paid on May 22 to shareholders of record on Apr 27.

Guidance

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.

Zacks Rank & Key Picks

Core Laboratories currently has a Zacks Rank #3 (Hold).

Some better-ranked players in the same industry are C&J Energy Services (NYSE:CJ) , Solaris Oilfield Infrastructure (NYSE:SOI) and Archrock, Inc. (NYSE:AROC) . While C&J Energy and Solaris Oilfield sport a Zacks Rank #1 (Strong Buy), Archrock carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

C&J Energy is expected to witness a year-over-year increase of 2,278.6% in 2018 earnings.

Solaris Oilfield is expected to witness a year-over-year increase of 262.5% in 2018 earnings.

Archrock is expected to witness a year-over-year increase of 195% in 2018 earnings.

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