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Why Is Core Laboratories (CLB) Up 7.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for Core Laboratories (CLB - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Core Laboratories 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.
Core Labs' Q4 Earnings In Line, Sales Beat
Core Laboratories reported fourth-quarter 2021 results, wherein adjusted earnings of 20 cents a share were on par with the Zacks Consensus Estimate. This is attributable to an improvement in the overall business landscape for the company and year-over-year international revenues of more than 14%. The bottom line showed an improvement from the year-ago quarter’s earnings of 18 cents per share. This upside is attributable to the year-over-year increase in revenues.
This oilfield service provider’s adjusted revenues of $125.1 million beat the Zacks Consensus Estimate of $123 million by about 1.5%. The top line also rose from the year-ago quarter’s revenues of $113.7 million.
Segmental Performance
Reservoir Description: Revenues decreased about 4.6% to $80.1 million from $83.8 million in the fourth quarter of 2020 and also lagged the Zacks Consensus Estimate of $84 million. Moreover, operating income fell from $19.4 million in the year-ago period to $7.2 million and also missed the Zacks Consensus Estimate of $9.2 million due to costs and inefficiencies associated with COVID-19. The operating margin of 9% was lower than the prior-year quarter’s 23.2%.
Production Enhancement: Revenues of $45 million compared favorably with $29.9 million in the fourth quarter a year earlier, which is a 51% increase year over year. It also beat the Zacks Consensus Estimate of $40.4 million. Additionally, growth possibilities were affected throughout the quarter. Moreover, segmental operating income of $7 million in the quarter beat the Zacks Consensus Estimate of $5.20 million. The year-ago period reported an operating income of $4.5 million. The strong numbers reflected growth in manufacturing efficiencies, robust overseas sales and continued market penetration, which more than offset longer supply-chain lead time and raw material shortage.
Financial Position and Dividend
As of Dec 31, 2021, Core Labs had cash and cash equivalents worth $17.7 million and long-term debt of $188.6 million. The company’s debt-to-capitalization was 54%.
In the reported quarter, CLB generated $7.1 million of operating cash and its capital expenditure totaled $4.8 million. This, in turn, led to $2.4 million of free cash flow (FCF). This is the 81st consecutive quarter of the company’s FCF recognition. Core Labs’ board of directors approved regular quarterly dividend of a cent per share on the company's common stock, payable on Mar 7, 2022, to all shareholders of record as of Feb 14, 2022.
2022 View
This company anticipates the momentum in U.S. land activity to pursue but predicts lower client activity due to the seasonality for the first quarter of 2022, which usually results in a decline in first-quarter revenues by mid-single digits.
For the first quarter of 2022, Core Labs’ revenues are anticipated in the $117-$122 million range, while operating income is estimated in the $11.9-$14 million band.
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 new client-driven technologies and geographical exploration along with a deepened concentration on digitization and automation throughout its business.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -14.29% due to these changes.
VGM Scores
Currently, Core Laboratories has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Core Laboratories has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Core Laboratories (CLB) Up 7.1% Since Last Earnings Report?
It has been about a month since the last earnings report for Core Laboratories (CLB - Free Report) . Shares have added about 7.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Core Laboratories 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.
Core Labs' Q4 Earnings In Line, Sales Beat
Core Laboratories reported fourth-quarter 2021 results, wherein adjusted earnings of 20 cents a share were on par with the Zacks Consensus Estimate. This is attributable to an improvement in the overall business landscape for the company and year-over-year international revenues of more than 14%. The bottom line showed an improvement from the year-ago quarter’s earnings of 18 cents per share. This upside is attributable to the year-over-year increase in revenues.
This oilfield service provider’s adjusted revenues of $125.1 million beat the Zacks Consensus Estimate of $123 million by about 1.5%. The top line also rose from the year-ago quarter’s revenues of $113.7 million.
Segmental Performance
Reservoir Description: Revenues decreased about 4.6% to $80.1 million from $83.8 million in the fourth quarter of 2020 and also lagged the Zacks Consensus Estimate of $84 million. Moreover, operating income fell from $19.4 million in the year-ago period to $7.2 million and also missed the Zacks Consensus Estimate of $9.2 million due to costs and inefficiencies associated with COVID-19. The operating margin of 9% was lower than the prior-year quarter’s 23.2%.
Production Enhancement: Revenues of $45 million compared favorably with $29.9 million in the fourth quarter a year earlier, which is a 51% increase year over year. It also beat the Zacks Consensus Estimate of $40.4 million.
Additionally, growth possibilities were affected throughout the quarter. Moreover, segmental operating income of $7 million in the quarter beat the Zacks Consensus Estimate of $5.20 million. The year-ago period reported an operating income of $4.5 million. The strong numbers reflected growth in manufacturing efficiencies, robust overseas sales and continued market penetration, which more than offset longer supply-chain lead time and raw material shortage.
Financial Position and Dividend
As of Dec 31, 2021, Core Labs had cash and cash equivalents worth $17.7 million and long-term debt of $188.6 million. The company’s debt-to-capitalization was 54%.
In the reported quarter, CLB generated $7.1 million of operating cash and its capital expenditure totaled $4.8 million. This, in turn, led to $2.4 million of free cash flow (FCF). This is the 81st consecutive quarter of the company’s FCF recognition.
Core Labs’ board of directors approved regular quarterly dividend of a cent per share on the company's common stock, payable on Mar 7, 2022, to all shareholders of record as of Feb 14, 2022.
2022 View
This company anticipates the momentum in U.S. land activity to pursue but predicts lower client activity due to the seasonality for the first quarter of 2022, which usually results in a decline in first-quarter revenues by mid-single digits.
For the first quarter of 2022, Core Labs’ revenues are anticipated in the $117-$122 million range, while operating income is estimated in the $11.9-$14 million band.
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 new client-driven technologies and geographical exploration along with a deepened concentration on digitization and automation throughout its business.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -14.29% due to these changes.
VGM Scores
Currently, Core Laboratories has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Core Laboratories has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.