Core Laboratories Meets Q3 Earnings, Lags Revenues (revised)

Oilfield services company Core Laboratories N.V.’s (CLB - Free Report) third-quarter 2016 adjusted diluted earnings of 38 cents per share, which matched the Zacks Consensus Estimate. The bottom line was notably below the year-ago quarter earnings of 83 cents per share.

Total revenue of $143.5 million not only lagged the Zacks Consensus Estimate of $147 million by 2.7% but was also nearly 27.3% below the prior-year quarter level of $197.3 million.

Segment Performance

Reservoir Description: Segment revenues were $100.3 million compared with $117.9 million in third-quarter 2015. Lower activity levels hampered the results.

Operating income (excluding foreign exchange losses) for the segment was about $20.4 million in the reported quarter. Operating margin for the quarter was around 20.3%.

Production Enhancement: Segment revenues were approximately $37.6 million in the reported quarter as against $64.9 million in third-quarter 2015. Reduced North American drilling activity hurt the results.

Operating income (excluding foreign exchange losses) for the segment was about $1.1 million in the reported quarter.

Reservoir Management: Segment revenues of about $5.7 million plunged nearly 60.7% year over year. The segment incurred an operating loss of $0.12 million.

Balance Sheet and Free Cash Flow

As of Sep 30, 2016, Core Laboratories had cash and cash equivalents of $17.2 million. Capital expenditures for the third quarter were $2.4 million.

The company generated free cash flow of approximately $32.4 million in the third quarter of 2016.

Quarterly Dividend and Share Repurchase

On Oct 11, 2016, the company’s board of directors announced the fourth-quarter dividend. Core Laboratories will pay a cash dividend of 55 cents per share, same as the previous payout. The dividend will be paid on Nov 22, to shareholders on record as of Oct 21 2016.

Guidance

For the fourth quarter, Core Laboratories expects earnings per share in the 38–40 cents range. The company expects fourth-quarter revenues to be in the $143–$145 million range.

Zacks Rank and Stocks to Consider

Currently, Core Laboratories holds a Zacks Rank #4 (Sell).

Some better-ranked players from the energy sector are W&T Offshore Inc. (WTI -Free Report) , CONE Midstream Partners LP (CNNX - Free Report) and Ultra Petroleum Corp. (UPLMQ - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).

In the last four quarters, W&T Offshore posted an average positive earnings surprise of 23.63%.

In the last four quarters, CONE Midstream Partners posted an average positive earnings surprise of 19.4%.

In the last four quarters, Ultra Petroleum posted an average positive earnings surprise of 65.9%.