Core Insights - Core Laboratories Inc. (CLB) is a global leader in providing innovative technology and expertise for oil and gas companies, focusing on reservoir description, production enhancement, and reservoir management services [1][2] - CLB has underperformed in the year-to-date (YTD) period, with a decline of 29.9%, significantly lagging behind the Oil & Gas Field Services sub-industry, which fell only 2.2% [3][4] Financial Performance - CLB's Q2 revenues increased by 5% sequentially to $130.2 million, with operating income excluding items rising over 23% sequentially and operating margins expanding by 160 basis points to 11% [9][11] - The Zacks Consensus Estimate for CLB's earnings per share has remained stable over the past 60 days, indicating a consistent outlook from analysts [10] Strategic Initiatives - The company opened a new Unconventional Core Analysis Lab in Dammam, Saudi Arabia, to support growth in the Middle East [9][13] - CLB's management emphasizes disciplined capital allocation, focusing on maximizing free cash flow and return on invested capital, with capital expenditures historically ranging from 2.5% to 4% of revenues [12] Competitive Positioning - CLB distinguishes itself through proprietary technologies that solve critical client problems, such as the Plug and Abandonment Circulation system, which saved a client an estimated $4 million [14] - Despite recent setbacks, CLB's technological capabilities may provide a competitive edge over peers like RPC, which relies more on traditional service offerings [14][18] Challenges and Risks - Limited near-term growth guidance for the Reservoir Description segment indicates potential stagnation, contrasting with more aggressive growth seen in competitors like ProPetro Holding [15][16] - The modest dividend yield of $0.01 per share may be unattractive to income-focused investors, as shareholder returns are primarily expected from share repurchases and capital appreciation [17] - Ongoing geopolitical and trade policy headwinds create uncertainty for CLB, particularly affecting demand for high-margin lab services [19]

Industry Overview - The Zacks Oil and Gas - Field Services industry provides support services to exploration and production companies, including well manufacturing, drilling equipment maintenance, and seismic testing [2] - The industry's performance is closely tied to upstream spending, with a shift towards liquefied natural gas (LNG) terminals creating new opportunities for some companies [2] Current Trends - The U.S. Energy Information Administration (EIA) projects a decline in the average price of West Texas Intermediate (WTI) crude oil, forecasting $64.16 per barrel for 2025 and $47.77 per barrel for 2026, which is expected to negatively impact exploration and production activities [3][4] - There is a trend of lower upstream spending as shareholders prefer capital returns over increased production, further reducing demand for oilfield services [4] - The growing demand for renewable energy is likely to diminish the need for traditional oilfield services as the world shifts towards cleaner energy sources [4] Market Performance - The Zacks Oil and Gas - Field Services industry has underperformed compared to the S&P 500 and the broader Zacks Oil - Energy sector, declining by 5.5% over the past year, while the S&P 500 rose by 20.5% and the broader sector grew by 1.8% [7] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 6.68X, significantly lower than the S&P 500's 18.65X and slightly higher than the sector's 5.11X [11] - Over the past five years, the industry's EV/EBITDA has ranged from a low of 1.60X to a high of 12.87X, with a median of 8.11X [11] Investment Opportunities - Archrock Inc (AROC) is recognized for its natural gas compression services and has secured long-term contracts that promise stable cash flows, currently holding a Zacks Rank of 2 (Buy) [14] - Core Laboratories (CLB) provides proprietary services for oil extraction and is focused on maximizing returns to shareholders, also holding a Zacks Rank of 2 [17][18] - TechnipFMC (FTI) is optimistic about increasing its subsea orders by over $10 billion this year, and it also carries a Zacks Rank of 2 [21]

Key Takeaways CLB stock jumped 13% in a month, outperforming its peers and the energy sector.Revenues rose 5% sequentially, with gains in Reservoir Description and Product Enhancement.CLB boosted cash flow, cut debt, repurchased shares and maintained dividends.Shares of Core Laboratories Inc. (CLB) gained momentum over the last month, following a staggering rise of 13% in just one month. During the same time period, the company’s shares outperformed the sub-industry and the broader oil and energy sector’s r ...

Core Insights - Core Laboratories Inc. (CLB) has underperformed in the oilfield services sector, with a stock decline of 28.4% over the past six months, contrasting with a 2.4% gain in the broader energy sector and a 7.7% decline in the Oil & Gas Field Services sub-industry [1][7] - Despite the decline, investor interest remains due to perceived undervaluation, prompting a closer examination of the factors influencing CLB's stock performance [3] Strategic Expansion - CLB is strategically expanding its operations in high-growth international markets, particularly in the Middle East, exemplified by the opening of a new Unconventional Core Analysis Laboratory in Dammam, Saudi Arabia, which enhances its partnership with Saudi Aramco [4][5] - The company is aligning its growth strategy with regional energy priorities and local content initiatives, similar to peers like TechnipFMC and Baker Hughes [5] Financial Position - The company has strengthened its balance sheet by reducing net debt by $9.1 million in the second quarter, achieving a leverage ratio of 1.27, the lowest in eight years [8] - CLB's conservative financial management provides resilience and strategic options compared to more capital-intensive peers [8] Diversification and Growth - CLB is diversifying into adjacent markets such as carbon capture and geothermal energy, utilizing its core expertise to create new revenue streams [9] - The company is leveraging its proprietary technologies for projects in Colombia and North America, indicating a proactive approach to energy transition [9] Macroeconomic Outlook - Management maintains a positive long-term outlook, anticipating global oil demand growth of 700,000 to 1.3 million barrels per day for 2025 and beyond, which will necessitate increased investment in international offshore developments [10] - This trend is expected to benefit CLB's global Reservoir Description services, aligning with the strategies of other major players in the sector [10] Operational Efficiency - CLB improved its operating margins by 160 basis points to 11% in the second quarter, driven by a 5% revenue increase, showcasing effective cost management [11] - Enhanced manufacturing efficiency contributed to better profitability despite cost pressures [11] Challenges and Risks - Tariffs on certain raw materials used in U.S. manufacturing pose cost pressures, although most services are not directly affected [12] - A sequential decline in demand for high-margin diagnostic services in the U.S. highlights volatility in this key service line [13] - The company faces ongoing softness in the U.S. onshore market, which could hinder growth and profitability [14] - CLB's revenue is dependent on clients' geological success rates, which has seen a noticeable decrease, impacting anticipated growth [15] Conclusion - CLB is strategically expanding and diversifying while maintaining a strong financial position and improving operational efficiency. However, challenges such as tariff-related costs, demand volatility, and dependence on client success rates create a mixed outlook for near-term performance [17]

Core Insights - Core Laboratories reported Q2 2025 GAAP revenue of $130.2 million, exceeding analyst expectations of $129.1 million, with adjusted EPS of $0.19 matching consensus estimates [1][3] - Revenue remained essentially unchanged compared to Q2 2024, indicating a lack of significant year-over-year growth despite operational progress [2][3] Financial Performance - Adjusted EPS for Q2 2025 was $0.19, down 13.6% from $0.22 in Q2 2024 [3] - Revenue of $130.2 million showed a slight decline of 0.3% from $130.6 million in the same quarter last year [3] - Operating income decreased by 11.6% to $14.5 million from $16.4 million year-over-year [3] - Free cash flow fell by 27% to $10.4 million compared to $14.3 million in Q2 2024 [3] Business Overview - Core Laboratories specializes in reservoir optimization and production enhancement services for the oil and gas industry, operating through two main segments: Reservoir Description and Production Enhancement [4][5] - The company emphasizes technological innovation and international expansion, with 66% of revenue generated outside the U.S. for the years ended December 31, 2024, and 2022 [5] Segment Performance - The Reservoir Description segment maintained steady performance, with flat revenue year-over-year but a 7% increase from the previous quarter, driven by demand for laboratory instrumentation [6][7] - The Production Enhancement segment experienced a 1.0% year-over-year revenue decline but a 3% sequential increase, with an operating income margin of 9%, reflecting a 50-basis point improvement [8] Financial Discipline - Free cash flow increased by 160% sequentially to $10.4 million, with net debt reduced to $94.8 million, the lowest in eight years [9] - The company maintained its quarterly dividend at $0.01 per share, consistent with prior quarters [9] Future Guidance - For Q3 2025, management forecasts GAAP revenue between $127.5 million and $134.5 million, with operating income expected to range from $13.6 million to $16.2 million [10] - Reservoir Description revenue is anticipated to remain flat sequentially, while Production Enhancement may see slight growth [10] Market Outlook - Management highlighted ongoing risks related to oil and gas industry cycles and unpredictable U.S. market activity, while emphasizing the importance of international project wins and cost discipline [11]

Financial Performance - Core Laboratories Inc. (CLB) reported second-quarter 2025 adjusted earnings of 19 cents per share, beating the Zacks Consensus Estimate of 18 cents, but down from 22 cents in the same quarter last year due to underperformance in the Reservoir Description segment [1] - The company achieved operating revenues of $130.2 million, exceeding the Zacks Consensus Estimate of $128 million, attributed to the rebound in maritime movement and crude oil trading, although it represented a slight decrease of 0.3% from $130.6 million in the prior year [2] - Total costs and expenses were reported at $114.9 million, a marginal increase of 0.3% from $114.6 million year-over-year, and below the estimate of $115.1 million [7] Segment Performance - Reservoir Description segment revenues remained flat at $86.3 million compared to the previous year, surpassing the estimate of $85 million [4] - Production Enhancement segment revenues decreased by 1% to $43.9 million from $44.3 million year-over-year, but still beat the estimate of $43.4 million [5] - Operating income for the Reservoir Description segment fell from $11.79 million to $10.84 million, missing the estimate of $11.18 million, influenced by geopolitical conflicts and tariffs [5] Cash Flow and Debt Management - The company reported a positive free cash flow of $10.4 million, with net cash provided by operating activities totaling $13.9 million and capital expenditure at $3.5 million [8] - CLB repurchased 237,632 shares for $2.7 million and reduced its debt leverage ratio to 1.27, with net debt decreasing by $9.1 million, marking the lowest leverage ratio in eight years [3][11] Future Outlook - For Q3 2025, CLB expects revenues between $127.5 million and $134.5 million, with operating income anticipated between $13.6 million and $16.2 million, and earnings per share projected between 18 cents and 22 cents [13] - The company forecasts Reservoir Description segment revenues to range from $84 million to $88 million, and Production Enhancement segment revenues to be between $43.5 million and $46.5 million [14] Industry Context - Global crude oil demand is projected to rise in 2025, estimated between 0.7-1.3 million barrels per day, primarily driven by non-OECD countries in Asia and emerging markets in the Middle East and Africa [15] - International oil and gas developments are expected to be more resilient to oil price fluctuations compared to domestic projects, with stable activity anticipated in global upstream markets [16] - Core Laboratories expects minimal disruption from proposed tariffs, as over 75% of its revenues come from services not currently subject to tariffs [17]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The financial statements present the company's financial position as of June 30, 2025, and its performance for the recent three and six-month periods [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased slightly to $602.1 million from $590.4 million at year-end 2024, driven by a rise in cash Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $237,677 | $226,606 | | **Total Assets** | **$602,111** | **$590,406** | | **Total Current Liabilities** | $104,772 | $97,586 | | **Long-Term Debt, net** | $124,613 | $126,111 | | **Total Liabilities** | $334,808 | $332,670 | | **Total Equity** | **$267,303** | **$257,736** | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, revenue was flat year-over-year at $130.2 million while net income rose, whereas six-month revenue and net income both declined Q2 2025 vs Q2 2024 Statement of Operations (in thousands, except per share data) | Metric | Q2 2025 (Unaudited) | Q2 2024 | | :--- | :--- | :--- | | Total Revenue | $130,159 | $130,577 | | Operating Income | $15,291 | $16,008 | | Net Income Attributable to Core Laboratories Inc. | $10,636 | $9,032 | | Diluted EPS Attributable to Core Laboratories Inc. | $0.22 | $0.19 | Six Months 2025 vs 2024 Statement of Operations (in thousands, except per share data) | Metric | Six Months 2025 (Unaudited) | Six Months 2024 | | :--- | :--- | :--- | | Total Revenue | $253,744 | $260,214 | | Operating Income | $19,708 | $24,579 | | Net Income Attributable to Core Laboratories Inc. | $10,482 | $12,252 | | Diluted EPS Attributable to Core Laboratories Inc. | $0.22 | $0.26 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, operating cash flow decreased to $20.6 million, while a net increase in cash was driven by lower financing and investing outflows Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 (Unaudited) | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,583 | $22,676 | | Net cash used in investing activities | $(872) | $(2,344) | | Net cash used in financing activities | $(7,680) | $(17,757) | | **Net Change in Cash** | **$12,031** | **$2,575** | | **Cash at End of Period** | **$31,188** | **$17,695** | - Key investing activities included **$7.9 million in capital expenditures** (including $1.6 million for rebuilding the Aberdeen facility) offset by **$4.7 million in insurance proceeds**[27](index=27&type=chunk)[149](index=149&type=chunk) - Financing activities included a net debt repayment of **$2.0 million**, **$4.8 million in common stock repurchases**, and **$0.9 million in dividends paid**[27](index=27&type=chunk)[151](index=151&type=chunk) [Notes to the Interim Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Interim%20Consolidated%20Financial%20Statements) The notes detail the company's two business segments, a renewed $150 million credit facility, debt covenant compliance, and a $2.6 million insurance recovery - The company operates in two complementary segments: **Reservoir Description** and **Production Enhancement**[29](index=29&type=chunk) - On July 22, 2025, the company entered into a Ninth Amended and Restated Credit Agreement for an aggregate borrowing commitment of **$150.0 million** with a **$50.0 million "accordion" feature**[46](index=46&type=chunk) - The company is in compliance with all debt covenants as of June 30, 2025, with a **leverage ratio of 1.27** and an **interest coverage ratio of 7.22**[51](index=51&type=chunk) - A quarterly cash dividend of **$0.01 per share** was paid in March and May 2025, and another was declared for August 2025[59](index=59&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a mixed market outlook, flat Q2 2025 revenue, segment performance, and the company's strong liquidity and capital resources [Outlook](index=23&type=section&id=Outlook) Management anticipates continued demand growth but notes increased uncertainty from trade policies and OPEC+ decisions, impacting project outlooks - Global demand for crude oil and natural gas is expected to increase in 2025, but **new U.S. tariffs and OPEC+ production increases have raised uncertainty**[92](index=92&type=chunk) - Management believes changes in crude oil prices will have a **greater impact on U.S. onshore drilling** and completion activity, while large-scale international projects are expected to be more resilient[93](index=93&type=chunk) - The company is focused on **large-scale international projects** and has seen expanded activity in carbon capture and sequestration projects[95](index=95&type=chunk)[96](index=96&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q2 2025 revenue was flat year-over-year at $130.2 million, while net income rose 18% due to a significantly lower effective tax rate Q2 2025 vs Q2 2024 and Q1 2025 Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | Q1 2025 | | :--- | :--- | :--- | :--- | | Total Revenue | $130,159 | $130,577 | $123,585 | | Operating Income | $15,291 | $16,008 | $4,417 | | Net Income Attributable to Core Labs | $10,636 | $9,032 | $(154) | - Service revenue in Q2 2025 was **flat year-over-year** as increased international demand was offset by a reduction in the U.S. market[106](index=106&type=chunk) - Product sales revenue **decreased 1% year-over-year** in Q2 2025 due to lower U.S. onshore drilling and completion activity[110](index=110&type=chunk) - Income tax expense for Q2 2025 was **$1.9 million (15.2% ETR)**, a significant decrease from $3.6 million (28.2% ETR) in Q2 2024, primarily due to the earnings mix of jurisdictions and other discrete items[128](index=128&type=chunk) [Segment Analysis](index=31&type=section&id=Segment%20Analysis) Reservoir Description revenue was flat with improved margins, while Production Enhancement revenue declined slightly with lower margins in Q2 2025 Q2 2025 Segment Performance (in thousands) | Segment | Revenue | % of Total | Operating Income | Operating Margin | | :--- | :--- | :--- | :--- | :--- | | Reservoir Description | $86,280 | 66% | $12,203 | 14% | | Production Enhancement | $43,879 | 34% | $3,148 | 7% | | **Consolidated** | **$130,159** | **100%** | **$15,291** | **12%** | - Reservoir Description's sequential revenue growth was driven by **higher crude-assay services** and manufactured laboratory instrumentation sales[134](index=134&type=chunk) - Production Enhancement's YoY revenue decrease was due to **lower product sales in the U.S. land market**, partially offset by growth in international bulk shipments and diagnostic services[140](index=140&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains solid liquidity with $14.3 million in free cash flow for H1 2025 and $108.0 million available under its credit facility Free Cash Flow Calculation (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,583 | $22,676 | | Less: Cash paid for capital expenditures - operations | $(6,259) | $(5,918) | | **Free cash flow** | **$14,324** | **$16,758** | - As of June 30, 2025, the company had an available borrowing capacity of approximately **$108.0 million** under its Credit Facility[154](index=154&type=chunk) - The company is in compliance with all covenants, with a **leverage ratio of 1.27** and an **interest coverage ratio of 7.22** for the period ended June 30, 2025[159](index=159&type=chunk) - The company maintains a quarterly dividend of **$0.01 per share**[147](index=147&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risk exposures since its 2024 year-end annual report - There have been **no material changes in market risk** from the information provided in the Annual Report on Form 10-K for the year ended December 31, 2024[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2025[163](index=163&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that materially affected, or are reasonably likely to materially affect, the internal controls[166](index=166&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the financial statement notes for details regarding the company's legal proceedings - Information on legal proceedings is available in **Note 9 - Commitments and Contingencies** of the financial statements[168](index=168&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company updated its risk factors to include potential adverse effects from tariffs and other trade measures on its business and supply chain - An updated risk factor highlights that **tariffs and other trade measures could adversely affect the business** by increasing input costs, disrupting the supply chain, and facing retaliatory measures[171](index=171&type=chunk) - Potential impacts include **increased costs for raw materials** like steel and electronic components, which may not be fully passed on to customers, thereby affecting results of operations[171](index=171&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 237,632 shares in Q2 2025 at an average price of $11.52 per share without a formal buyback program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 1-30, 2025 | 139,435 | $11.70 | | May 1-31, 2025 | 83,197 | $11.13 | | June 1-30, 2025 | 15,000 | $12.14 | | **Total** | **237,632** | **$11.52** | - The company **does not have a formal share repurchase program**; repurchases are made at the discretion of management with Board authorization[178](index=178&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No director or officer adopted, modified, or terminated any Rule 10b5-1 trading arrangement during the second quarter of 2025 - **No director or officer adopted, modified, or terminated a Rule 10b5-1 trading arrangement** during the three months ended June 30, 2025[177](index=177&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including the amended credit agreement and required CEO/CFO certifications - Key exhibits filed include the **Ninth Amended and Restated Credit Agreement** and certifications by the CEO and CFO[179](index=179&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $130.2 million, up 5% from Q1 2025 and flat year-over-year [13] - Operating income increased to $14.5 million, up from $11.8 million in Q1 2025, yielding an EBIT margin of over 11% [18] - Net income, excluding items, was $8.8 million, an increase from $6.7 million in the prior quarter but a decrease from $10.4 million in the same quarter last year [19] - Earnings per diluted share, excluding items, was $0.19, up from $0.14 in Q1 2025 and down from $0.22 last year [20] Business Line Data and Key Metrics Changes - Reservoir Description revenue was $86.3 million, up 7% compared to Q1 2025, with operating margins at 13%, up from 10% in Q1 [7][39] - Production Enhancement revenue was $43.9 million, up 3% compared to Q1 2025, with operating margins at 9%, up from 8% in Q1 [9][42] Market Data and Key Metrics Changes - International product sales increased by 25% sequentially, driven by bulk shipments and increased laboratory instrumentation sales [14] - Demand for product sales decreased in the U.S. onshore market but was offset by higher international sales [15] Company Strategy and Development Direction - The company focuses on technology investments to solve client problems and capitalize on technical and geographic opportunities [7] - Core Laboratories aims to maximize free cash flow, return on invested capital, and return excess free cash to shareholders [11] - The company plans to introduce new products and services in key geographic markets while maintaining a lean organization [10] Management's Comments on Operating Environment and Future Outlook - Management maintains a constructive long-term outlook for international upstream activity despite near-term volatility in crude oil prices [28] - The company anticipates that changes in crude oil prices will have a more immediate impact on U.S. onshore activity levels [30] - Core Laboratories expects third-quarter revenue to range from $127.5 million to $134.5 million, with operating income projected between $13.6 million and $16.2 million [32] Other Important Information - The company repurchased over 237,000 shares during Q2 2025, valued at $2.7 million [9] - Core's net debt was reduced by more than $9 million, with a leverage ratio of 1.27, the lowest in eight years [9][22] Q&A Session Summary Question: Additional details on the new proppant design partnered with a West Texas operator - The engagement focused on testing different designs of proppant particle size and sorting, confirming better results with the new design [48] Question: Insights on new product or service offerings, particularly in The Middle East - The company is focused on formation damage testing and has opened an unconventional laboratory in Dammam, Saudi Arabia, to support growing opportunities in unconventional resource development [52][53]

Group 1 - Core Laboratories reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, but down from $0.22 per share a year ago, representing an earnings surprise of +5.56% [1] - The company posted revenues of $130.16 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.45%, although this is a decrease from year-ago revenues of $130.58 million [2] - Core Laboratories has underperformed the market, with shares losing about 32% since the beginning of the year compared to the S&P 500's gain of 7.3% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.18 on revenues of $126.55 million, and for the current fiscal year, it is $0.71 on revenues of $505.39 million [7] - The Zacks Industry Rank indicates that the Oil and Gas - Field Services sector is currently in the bottom 5% of over 250 Zacks industries, suggesting a challenging environment for companies in this sector [8] Group 3 - The estimate revisions trend for Core Laboratories was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Company Overview - Core Laboratories Inc. reported second quarter 2025 revenue of $130.2 million, reflecting a 5% sequential increase and flat year-over-year performance [8][30] - The company's operating income was $15.3 million, with earnings per diluted share (EPS) of $0.22, while operating income excluding items was $14.5 million, yielding operating margins of 11% [8][30] - Free cash flow for the quarter was $10.4 million, up over 160% sequentially, and the company repurchased 237,632 shares valued at $2.7 million [8][11] Segment Performance - Reservoir Description segment generated revenue of $86.3 million, up 7% sequentially and flat year-over-year, with operating income of $12.2 million [3][30] - Production Enhancement segment reported revenue of $43.9 million, a 3% sequential increase but flat year-over-year, with operating income of $3.1 million [6][30] Strategic Initiatives - Core Lab opened a new Unconventional Core Analysis Laboratory in Dammam, Saudi Arabia, enhancing its service capabilities in the Middle East [4] - The company completed a comprehensive analytical program for a major International Oil Company in the Campos Basin, Brazil, reinforcing its role as a trusted technical partner [5] Financial Health - As of June 30, 2025, Core's net debt was $94.8 million, reduced by $9.1 million during the quarter, with a leverage ratio of 1.27, the lowest in eight years [12][13] - The company renewed its credit agreement, expanding to include a $100 million revolving credit facility and a $50 million delayed draw term loan [13] Market Outlook - Despite geopolitical challenges and softer U.S. land activity, Core maintains a positive long-term outlook for international upstream activity, with forecasts for crude oil demand growth between 0.7 and 1.3 million barrels per day in 2025 [19][20] - The company anticipates that large-scale international oil and gas projects will remain less sensitive to near-term crude oil price volatility [20]