A month has gone by since the last earnings report for Core Laboratories (CLB Quick QuoteCLB - Free Report) . Shares have added about 6.2% 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 its most recent earnings report in order to get a better handle on the important drivers.

Core Laboratories Q1 Earnings and Sales Beat Estimates

Core Laboratories reported first-quarter 2024 adjusted earnings of 19 cents per share, which beat the Zacks Consensus Estimate of 16 cents. This can be attributed to better-than-expected performance from the Reservoir Description segment. The bottom line was in line with the year-ago quarter’s reported figure.

However, this oilfield service provider’s operating revenues of $129.6 million beat the Zacks Consensus Estimate of $124 million by 4.5%. The top line increased 0.9% from the year-ago quarter’s level of $128.4 million. This can be attributed to the Reservoir Description segment’s impressive performance.

Segmental Performance

Reservoir Description: Revenues in this segment increased about 5% to $84.2 million from $80.2 million in the first quarter of 2023. The top line also beat our projection of $81.8 million. Operating income increased from $2.5 million in the year-ago period to $6.9 million. This was due to increased demand for reservoir rock and fluid analysis in both international and U.S. markets. However, the figure missed our estimate of $11 million. 

Production Enhancement: This segment’s revenues decreased 5.8% to $45.4 million from $48.2 million in the prior-year quarter. The top line beat our estimate of $42.4 million.  Operating income of $1.6 million missed our projection of $1.9 million due to a decrease in completion activity. The figure also declined from the year-ago quarter’s reported profit of $3.3 million.

Financials and Dividends

As of Mar 31, 2024, Core Laboratories had cash and cash equivalents of $14.9 million and long-term debt of $160.4 million. The company’s debt-to-capitalization was 40.3%.

Operating cash totaled $5.5 million, while capital expenditure amounted to $3.1 million. This led to a positive free cash flow of $2.5 million.

CLB’s board of directors approved a regular quarterly dividend of a cent per share on the company's common stock, payable on May 28, 2024, to all shareholders of record as of May 6, 2024.

Outlook

For the second quarter of 2024, revenues are anticipated to be in the range of $130-$136 million. Operating income is estimated to be in the band of $14.5-$17.3 million.  EPS is expected between 19 cents and 23 cents.

Reservoir Description revenues are expected to be in the range of $85.5-$88.5 million for the second quarter of 2024, with an operating income of $12.7-$14.4 million.  Production Enhancement revenues are estimated to be in the band of $44.5-$47.5 million during the same time frame, with an operating income of $1.6-$2.6 million. The second-quarter 2024 guidance also assumes an effective tax rate of 20%.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, Core Laboratories has an average Growth Score of C, however its Momentum Score is doing a bit 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Core Laboratories has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.