Core Lab Posts Stellar 1Q Earnings - Analyst Blog
18 April 2013 - 11:45PM
Zacks
Oilfield service company,
Core Laboratories N.V. (CLB) reported excellent
firstquarter 2013 results, highlighting global deepwater
hydrocarbon developments.
Quarterly earnings per share (EPS) came in at $1.22, surpassing the
Zacks Consensus Estimate of $1.15. Comparing year over year, EPS
increased 8.0% excluding one-time items.
The company’s consistent emphasis on international crude-oil
developments (mainly in deepwater), its global high-grading
unconventional crude oil and natural gas opportunities and
improvements in operations in North America complemented the
results.
Total revenue was $260.9 million, up 11.4% from $234.2 million in
the prior-year quarter buoyed by strong growth across all segments.
The top line also breezed past the Zacks Consensus Estimate of
$245.0 million.
Reservoir Description Segment
Revenues from the Reservoir Description segment (which focuses on
international crude oil related projects) increased 7.9% year over
year to $125.2 million in the first quarter. Operating income for
the unit grew 7.5% year over year to $34.9 million. Operating
margin was 28%. The improvement was attributed to Core Lab’s focus
on global deepwater developments, mainly Lower Tertiary in the Gulf
of Mexico. The use of superior quality technologies also boosted
the segment’s performance.
Production Enhancement Segment
Core Labs’ Production Enhancement revenues grew 11.1% year over
year to $107.4 million in the quarter and operating income
increased 2.1% year over year to $34.2 million. Operating margin
was 32%. Even with a decline in North American rig count, the
results were buoyed by the greater market share of the HTD-Blast
and HTD-BlastXL perforating systems and high demand for the
company’s fracture-stimulation diagnostic services.
Reservoir Management Segment
Quarterly revenues from Reservoir Management operations were $28.3
million, up 32.3% year over year, while operating income moved up
24.4% year over year to $9.8 million. Operating margin was 35%. The
primary catalysts for the segment were high-quality study results
that have attracted many projects. Core Lab has undertaken a number
of reservoir analysis ventures in onshore and offshore plays, which
boosted the segment’s results.
Balance Sheet & Free Cash Flow
As of Mar 31, 2013, Core Lab had cash and cash equivalents of $22.9
million. Capital expenditures for the first quarter were $8.4
million. The company generated free cash flow of $59.8 million.
Quarterly Dividend
On Apr 15, 2013, Core Lab’s board of directors declared a quarterly
common stock dividend of 32 cents per share ($1.28 per share
annualized). The dividend will be paid on May 24, to shareholders
of record as of Apr 26.
Outlook
Amsterdam, the Netherlands-based Core Lab provided a positive
outlook for 2013, reflecting the favorable Brent crude pricing
along with the arrival of additional deepwater drilling rigs. These
will enable the company to walk into more new projects and operate
in other rich oil and gas acreages. Core Lab also plans to use
advanced technologies and add services aimed at boosting the daily
production and hydrocarbon recovery rates.
For the second quarter, Core Lab forecasts total revenue in the
$264 million to $269 million range. Earnings per share will likely
be between $1.29 and $1.36. For 2013, total revenue is expected in
the $1,060 million to $1,075 million bracket and earnings per share
will likely be between $5.06 and $5.26.
Zacks Rating
The company currently retains a Zacks Rank #4 (Sell), implying that
it is expected to underperform the broader U.S. equity market over
the next one to three months.
Core Lab has operations in over 50 countries, with approximately
50% of its total revenue coming from international markets. As
such, the company is exposed to risks associated with doing
business abroad. Such risks include embargoes and expropriation of
assets, exchange rate risks, terrorism as well as political/civil
sentiment in critical countries like Iran, Iraq, Nigeria and
Venezuela.
Additionally, Core Lab relies on its ability to develop and acquire
essential products and technologies that drive its operational
performance and growth. If these technologies or products become
obsolete or cannot be brought to market in a timely and competitive
manner, the company might face severe operational and financial
dilemmas.
However, certain other companies in the oilfield service industry
are expected to perform well in the coming one to three months.
These include Compressco Partners L.P. (GSJK) and
Exterran Partners L.P. (EXLP) with a Zacks Rank #1
(Strong Buy) as well as Exterran Holdings Inc.
(EXH) with a Zacks Rank #2 (Buy).
CORE LABS NV (CLB): Free Stock Analysis Report
EXTERRAN HLDGS (EXH): Free Stock Analysis Report
EXTERRAN PTNRS (EXLP): Free Stock Analysis Report
COMPRESSCO PTNR (GSJK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
CSI Compressco (NASDAQ:CCLP)
Historical Stock Chart
From Jun 2024 to Jul 2024
CSI Compressco (NASDAQ:CCLP)
Historical Stock Chart
From Jul 2023 to Jul 2024