Core Laboratories (CLB) reported fourth-quarter 2023 adjusted earnings of 19 cents per share, which missed the Zacks Consensus Estimate of 20 cents. The bottom line was also lower than the year-ago quarter’s reported figure of 20 cents. This could be attributed to poor performance in the Production Enhancement segment.

However, this oilfield service provider’s operating revenues of $128 million were in line with the Zacks Consensus Estimate. The top line increased 0.3% from the year-ago quarter’s level of $127.6 million. This can be attributed to the Reservoir Description segment’s impressive performance.

Core Laboratories Inc. Price, Consensus and EPS Surprise Core Laboratories Inc. Price, Consensus and EPS Surprise

Core Laboratories Inc. price-consensus-eps-surprise-chart | Core Laboratories Inc. Quote

Segmental Performance

Reservoir Description: Revenues in this segment increased about 8.3% to $84.6 million from $78.1 million in the fourth quarter of 2022. The top line also beat our projection of $84.3 million. Operating income increased from $6.8 million in the year-ago period to $12.3 million but missed our estimate of $13.2 million.  This was due to increased demand for reservoir rock and fluid analysis in international markets.

Production Enhancement

This segment’s revenues decreased 11.6% to $43.6 million from $49.3 million in the prior-year quarter. The figure slightly lagged our estimate of $43.7 million. Operating income of $2.2 million missed our projection of $3.5 million. The figure also deteriorated from the year-ago quarter’s level of $7.9 million due to a decrease in U.S. onshore well completion activity.

Financials and Dividends

As of Dec 31, 2023, Core Labs had cash and cash equivalents worth $15.1 million and long-term debt of $163.1 million. The company’s debt-to-capitalization ratio was 41.1%.

CLB generated $19.4 million of operating cash in the reported quarter. Its capital expenditure totaled $2.7 million.

The company’s board of directors approved a regular quarterly dividend of 1 cent per share on its common stock, payable on Mar 4, 2024, to all shareholders of record as of Feb 12, 2024.



Outlook

For the first quarter of 2024, revenues are anticipated to be in the range of $122-$128 million. Operating income is estimated in the band of $11.8-$14.3 million.  EPS is expected between 14 cents and 18 cents.

Reservoir Description revenues are expected to be in the range of $80-$84 million for the first quarter of 2024, with an operating income of $10.1-$11.9 million.  Production Enhancement revenues are estimated to be in the band of $42-$44 million during the same time frame, with an operating income of $1.5-$2.2 million.

Zacks Rank and Key Picks

Currently, CLB carries a Zacks Rank #3 (Hold).

Investors interested in the energy sector might look at some better-ranked stocks like Subsea 7 S.A. SUBCY and Oceaneering International, Inc. OII, both sporting a Zacks Rank #1 (Strong Buy), and Enbridge Inc. (ENB), carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Subsea 7 is valued at $4.13 billion. The company currently pays a dividend of 38 cents per share, or 2.81%, on an annual basis.

SUBCY offers offshore project services for the energy industry, specializing in subsea field development, covering project management, design, engineering, procurement, fabrication, survey, installation and commissioning of seabed production facilities.

Oceaneering International is worth $2.15 billion. In the past year, its shares have fallen 2.7%.

The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.

Enbridge is valued at $76.48 billion. The company currently pays a dividend of $2.6 per share, or 7.22%, on an annual basis.

Enbridge and its subsidiaries are an energy infrastructure company with five segments — Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation and Energy Services.

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