Financial Data and Key Metrics Changes - Revenue for Q2 2024 was $130.6 million, a slight increase from $129.6 million in Q1 2024 and $127.9 million in Q2 2023, driven by increased demand in the U.S. and certain international regions [9][22] - Operating income improved sequentially, with operating margins increasing from 12% to 13% [17][22] - Free cash flow for the quarter was $14.3 million, contributing to a total of $16.8 million for the first half of 2024, a significant improvement from $1.2 million in the same period last year [35] Business Line Data and Key Metrics Changes - In the Reservoir Description segment, revenue increased by over 2% compared to Q1 2024, with operating margins at 14% [14][54] - The Production Enhancement segment saw a revenue decline of approximately 2% compared to Q1 2024, but operating margins improved to 10%, up over 260 basis points due to cost control measures [15][40] Market Data and Key Metrics Changes - Demand for laboratory-based reservoir rock and fluid analytical programs continues to improve globally, particularly in certain international regions, despite geopolitical conflicts impacting demand [9][14] - The U.S. frac spread count is trending lower, indicating a soft market for the remainder of the year, although international and offshore diagnostic services are expected to offset declines in U.S. onshore activity [25][52] Company Strategy and Development Direction - The company aims to introduce new product and service offerings in key geographic markets, maintain a lean organization, and focus on deleveraging to strengthen its balance sheet [17][18] - Core Laboratories is committed to maximizing free cash flow and returning excess cash to shareholders while investing in growth opportunities [18][90] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued volatility in crude oil markets due to global economic and geopolitical risks, but projects growth in demand for proprietary services and products [24][52] - The company expects third quarter 2024 revenue to range from $131 million to $137 million, with operating income projected between $16.9 million and $19.1 million [36] Other Important Information - The company reduced its net debt by $15.8 million or 10%, lowering its leverage ratio to 1.66, the lowest in five years [16][23] - G&A expenses for the quarter were $10.3 million, up from $8.3 million in the prior quarter, primarily due to changes in company-owned life insurance investments and new initiatives [30] Q&A Session Summary Question: Emulsion treatment plant and opportunities in the U.S. - Management elaborated on the emulsion treatment plant's role in identifying problematic wells and emphasized the potential for addressing emulsion issues in the U.S. land market [60][65] Question: Insights from international meetings - Management found the meetings with international operators reaffirming and inspiring, indicating a positive outlook for future work and capital investment [67] Question: Impact of natural gas prices on U.S. activity - Management noted that firmer natural gas prices could support increased drilling and completion activity in the U.S., and highlighted the potential benefits of market consolidations for Core Laboratories [72][72] Question: Efficiency in drilling and completion - Management clarified that while drilling activity does not directly impact revenue, the complexity of completions drives demand for Core's services, suggesting that longer and more complex wells are beneficial for the company [73][74]

Core Laboratories Overview - Core Laboratories reported quarterly earnings of $0.22 per share, exceeding the Zacks Consensus Estimate of $0.21 per share, and matching earnings from the previous year [8] - The company posted revenues of $130.58 million for the quarter ended June 2024, which was 1.33% below the Zacks Consensus Estimate, but an increase from $127.88 million year-over-year [2] - Core Laboratories has surpassed consensus EPS estimates two times over the last four quarters [9] Stock Performance - Core Laboratories shares have increased approximately 26.1% since the beginning of the year, outperforming the S&P 500's gain of 16.5% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call and future earnings expectations [10] Future Earnings Expectations - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $136.15 million, and for the current fiscal year, it is $0.94 on revenues of $537.13 million [5] - The estimate revisions trend for Core Laboratories is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [12] Industry Context - The Oil and Gas - Field Services industry, to which Core Laboratories belongs, is currently ranked in the bottom 13% of over 250 Zacks industries, which may impact stock performance [13] - Another company in the same industry, Archrock Inc., is expected to report revenues of $270.59 million, reflecting a 9.3% increase from the previous year [7]

Financial Performance - Core Laboratories reported Q2 2024 revenue of $130.6 million, with operating income of $16 million and diluted EPS of $0.19[7]. - Operating income, excluding specific items, was $16.4 million, yielding operating margins of 13%, an increase of over 100 basis points sequentially[7]. - Revenue for the six months ended June 30, 2024, was $260.2 million, a 1.6% increase from $256.2 million in 2023[23]. - Operating income decreased by 3.2% to $24.6 million compared to $25.4 million in the previous year[23]. - Net income attributable to Core Laboratories Inc. was $12.3 million, down 51.4% from $25.2 million in 2023[23]. - Diluted earnings per share (EPS) fell to $0.26, a decrease of 50.9% from $0.53 in the same period last year[23]. - Revenue for the three months ended June 30, 2024, was $130,577 million, representing a 0.7% increase from Q1 2024 and a 2.1% increase from Q2 2023[43]. - Operating income increased by 86.8% to $16,008 million compared to $8,571 million in Q1 2024, but decreased by 15.3% from $18,906 million in Q2 2023[43]. - Net income for the period was $9,190 million, a 163.3% increase from $3,490 million in Q1 2024, but a 59.9% decrease from $22,929 million in Q2 2023[43]. - Diluted earnings per share attributable to Core Laboratories Inc. was $0.19, up 171.4% from $0.07 in Q1 2024, but down 60.4% from $0.48 in Q2 2023[43]. Segment Performance - The Reservoir Description segment generated $86.3 million in revenue, up 2% sequentially and 3% year-over-year, marking six consecutive quarters of growth[8]. - Production Enhancement operations reported Q2 2024 revenue of $44.3 million, flat year-over-year, with operating income of $4.4 million[10]. - Reservoir Description segment revenue increased by 4.2% to $170.5 million, while Production Enhancement revenue decreased by 3.2% to $89.7 million[23]. - The company projects third quarter 2024 revenue for Reservoir Description to range from $86.5 million to $89.5 million[37]. Cash Flow and Debt - Free cash flow for the second quarter of 2024 was $14.3 million, with net debt reduced by $15.8 million[28]. - Net cash provided by operating activities for the six months ended June 30, 2024, was $22,676 million, indicating robust cash flow generation capabilities[49]. - As of June 30, 2024, Core's net debt was $132.3 million, reduced by $15.8 million during the quarter, with a leverage ratio of 1.66[12]. Market Outlook - Core anticipates a soft market for U.S. onshore activity for the remainder of the year, but expects growth in international and offshore services to offset declines[16]. - Core Laboratories anticipates sustainable client activity growth in international upstream projects, driven by rising crude-oil demand[36]. Equity and Assets - Total assets as of June 30, 2024, were $597.8 million, an increase of 1.7% from the previous quarter[1]. - Total equity increased to $245.7 million, reflecting a 3.5% growth compared to the prior quarter[1]. Dividends and Tax - The company declared a cash dividend of $0.01 per share, payable on August 26, 2024[13]. - The effective tax rate for the third quarter 2024 guidance is assumed to be 20%[38]. - The effective tax rate for the period was 28%, compared to 32% in Q1 2024 and a negative 46% in Q2 2023[43]. Return on Investment - Return on Invested Capital (ROIC) as of June 30, 2024, was reported at 8.0%[26].

Core Viewpoint - Core Laboratories Inc. (CLB) is expected to report second-quarter earnings on July 24, with a consensus estimate of a profit of 22 cents per share and revenues of $133.34 million [1] Earnings Performance - The Zacks Consensus Estimate for second-quarter 2024 earnings has seen both upward and downward revisions in the past 30 days, indicating a 4.76% year-over-year increase, while revenues are expected to rise by 3.49% compared to the previous year [3] - CLB's revenues are projected to increase to $133 million from $129.6 million in the prior year, driven by strong performance in the Reservoir Description segment [4] - In the last reported quarter, CLB achieved adjusted earnings of 19 cents per share, exceeding the consensus estimate by 3 cents, with revenues of $129.6 million also surpassing expectations by 4.5% [10] Earnings Prediction - The Earnings ESP for CLB is -2.33%, indicating that the model does not predict an earnings beat for this reporting cycle [12] - CLB currently holds a Zacks Rank of 3 (Hold), which does not suggest a strong likelihood of an earnings beat [20] Operating Expenses - Projected operating expenses for the quarter are expected to reach $118.4 million, an increase of 8.7% from the previous year, with direct operating costs rising from $100.3 million to $104.6 million [17]

Company Overview - Core Laboratories (CLB) is expected to report a year-over-year increase in earnings, with a consensus EPS estimate of $0.22 per share, reflecting a +4.8% change [7] - The upcoming earnings report is scheduled for July 24, 2024, and the stock may react positively if key numbers exceed expectations [6][5] Earnings Estimates and Revisions - The consensus EPS estimate for Core Laboratories has been revised 3.13% lower over the last 30 days, indicating a reassessment by analysts [1] - The Most Accurate Estimate for Core Laboratories is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.33%, suggesting a bearish outlook from analysts [21] Earnings Surprise History - In the last reported quarter, Core Laboratories had an expected EPS of $0.16 but delivered $0.19, resulting in a positive surprise of +18.75% [12] - Over the last four quarters, Core Laboratories has beaten consensus EPS estimates two times [13] Industry Context - In the Zacks Oil and Gas - Field Services industry, Halliburton (HAL) is expected to post earnings of $0.80 per share for the quarter ended June 2024, indicating a +3.9% year-over-year change [17] - Halliburton's revenue is projected to be $5.95 billion, up 2.6% from the previous year [17]

Core Laboratories Overview - Core Laboratories reported Q1 2024 adjusted earnings of 19 cents per share, exceeding the Zacks Consensus Estimate of 16 cents, driven by strong performance in the Reservoir Description segment [2] - Operating revenues reached $129.6 million, surpassing the Zacks Consensus Estimate of $124 million by 4.5%, and increased by 0.9% from $128.4 million in the same quarter last year [3] Segmental Performance - Reservoir Description segment revenues rose approximately 5% to $84.2 million from $80.2 million year-over-year, beating projections of $81.8 million, with operating income increasing from $2.5 million to $6.9 million, although it fell short of the $11 million estimate [4] - Production Enhancement segment revenues decreased by 5.8% to $45.4 million from $48.2 million in the prior-year quarter, but still exceeded the estimate of $42.4 million; operating income of $1.6 million missed the projection of $1.9 million [5] Financials - As of March 31, 2024, Core Laboratories had cash and cash equivalents of $14.9 million and long-term debt of $160.4 million, with a debt-to-capitalization ratio of 40.3% [6] - The company reported operating cash of $5.5 million and capital expenditures of $3.1 million, resulting in a positive free cash flow of $2.5 million [6] Dividends - The board of directors approved a regular quarterly dividend of $0.01 per share, payable on May 28, 2024, to shareholders of record as of May 6, 2024 [7] Outlook - For Q2 2024, revenues are expected to range between $130 million and $136 million, with operating income estimated between $14.5 million and $17.3 million, and EPS projected between 19 cents and 23 cents [8] - Reservoir Description revenues are anticipated to be between $85.5 million and $88.5 million, with operating income of $12.7 million to $14.4 million; Production Enhancement revenues are expected to be between $44.5 million and $47.5 million, with operating income of $1.6 million to $2.6 million [9] Analyst Sentiment - Analysts have not issued any earnings estimate revisions in the past two months, indicating a stable outlook [10] - Core Laboratories holds a Zacks Rank 3 (Hold), suggesting an expectation of an in-line return from the stock in the coming months [13]

Financial Performance - For the three months ended March 31, 2024, cash flows provided by operating activities improved to $5.5 million compared to cash used in operating activities of $3.2 million in the same period of 2023[119] - Free cash flow for the three months ended March 31, 2024 was $2.5 million, compared to negative $5.4 million for the same period in 2023[134] - Cash flows from operating activities for the three months ended March 31, 2024, were $5.5 million, a significant increase from a cash outflow of $3.2 million in the same period of 2023[127] - Free cash flow for the three months ended March 31, 2024, was $2.5 million, compared to negative $5.4 million for the same period in 2023, reflecting improved operational performance[134] Capital Expenditures and Investments - Cash flows used in investing activities for the three months ended March 31, 2024 were $1.7 million, primarily driven by capital expenditures of $3.1 million[131] - Cash flows used in investing activities for the three months ended March 31, 2024, were $1.7 million, primarily driven by capital expenditures of $3.1 million[131] Debt and Financing - As of March 31, 2024, total long-term debt was $163 million, a slight decrease from $166 million as of December 31, 2023[120] - Cash flows used in financing activities for the three months ended March 31, 2024 included a $3.0 million net reduction in long-term debt[132] - Cash flows used in financing activities for the three months ended March 31, 2024, included a $3.0 million net reduction in long-term debt and quarterly dividends of $0.5 million[132] - The company has a secured credit facility with an aggregate borrowing commitment of $135.0 million and an available borrowing capacity of approximately $72.2 million as of March 31, 2024[136] - The leverage ratio is reported at 1.76 and the interest coverage ratio is 6.27 for the period ended March 31, 2024, indicating compliance with all covenants[138] Dividends - The company continues to maintain a quarterly dividend of $0.01 per share[129] - The company continues to maintain a quarterly dividend of $0.01 per share[129] Market Conditions - The current global demand for crude oil and natural gas remains high, with expectations for continued growth in 2024 and 2025 according to the International Energy Agency[115] - Global oil inventories are low relative to historical levels, with supply expected to remain tight due to OPEC+ production restrictions[117] - Capital spending towards the exploration of crude oil and natural gas reached its highest level in over a decade in 2022 and 2023, with modest growth expected in 2024 and 2025[115] Company Overview - The company has over 70 offices in more than 50 countries and employs approximately 3,500 people worldwide[110] - As of March 31, 2024, $13.6 million of the company's cash was held by foreign subsidiaries, out of a total of $14.9 million[125] - The company has not experienced any material changes in market risk as of the latest reporting period[121] - The company will continue to monitor and evaluate the availability of debt and equity markets to support future financing needs[124]

Financial Data and Key Metrics Changes - Revenue for the first quarter of 2024 was $129.6 million, a slight increase from $128.2 million in the prior quarter and $128.4 million in the first quarter of the previous year, overcoming typical seasonal declines [20][43] - Operating income for the first quarter was $14.9 million with operating margins at 12%, flat compared to Q4 of 2023 [3][29] - Net income ex-items for the quarter was $8.9 million, relatively flat from the previous quarter and a slight increase from $8.8 million in the first quarter of last year [32] Business Line Data and Key Metrics Changes - Reservoir Description revenue was flat sequentially at $84.2 million, with operating income ex-items at $11.4 million and operating margins at 14%, down slightly from Q4 [66] - Production Enhancement revenue increased to $45.4 million, up approximately 4% sequentially, with operating income ex-items at $3.4 million and operating margins at 8%, up from 6% in Q4 [79][80] Market Data and Key Metrics Changes - U.S. land completion activity was down approximately 11% compared to Q4, but U.S. product sales increased by 7% sequentially, reflecting improved market penetration [44] - International growth is expected to continue, particularly in regions not affected by geopolitical conflicts, with double-digit growth anticipated in key areas [12][13] Company Strategy and Development Direction - The company aims to introduce new problem-solving products and services in key geographic markets while maintaining a lean organization and commitment to deleveraging [6][9] - Core Lab is focused on maximizing free cash flow, return on invested capital, and returning excess free cash to shareholders [48][91] Management's Comments on Operating Environment and Future Outlook - Management maintains a constructive outlook on international upstream projects for 2024, anticipating sustainable activity growth to support crude oil demand [10] - The geopolitical situations in Russia-Ukraine and the Middle East are creating volatility, impacting demand for lab services in those regions [11][14] Other Important Information - The company recorded a charge of $3.5 million for non-cash stock compensation and $2.6 million for costs associated with exiting and consolidating facilities [19] - Free cash flow generated during the quarter was primarily used to reduce debt, with a leverage ratio of 1.76 [36][47] Q&A Session Summary Question: What is the outlook for the R&D business and international growth? - Management acknowledged challenges due to geopolitical conflicts impacting crude oil trading and assay work, which may affect growth rates for Reservoir Description services [86] Question: How does the company view the competitive landscape, particularly regarding perforating businesses? - Management noted that the market is crowded, but Core Lab's technological advantages allow for innovation and competitiveness despite challenges in margin progression [90] Question: What are the expectations for cash generation relative to historical levels? - Management indicated that cash generation is influenced by macro market conditions and operational efficiencies, with expectations for improved margins and cash flow as activity levels increase [88][99]

Core Laboratories (CLB) 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 l ...

Financial Performance - First quarter 2024 revenue was $129.6 million, reflecting a modest increase both sequentially and year-over-year[2] - First quarter operating income was $8.6 million; ex-items operating income was $14.9 million, flat sequentially and up 3% year-over-year[2] - First quarter GAAP EPS was $0.07; ex-items EPS was $0.19, remaining flat sequentially and year-over-year[2] - Revenue for the three months ended March 31, 2024, was $129,637 million, a 1.1% increase compared to $128,210 million in Q4 2023[27] - Operating income decreased by 41.2% to $8,571 million from $14,581 million in the previous quarter[27] - Net income increased by 43.4% to $3,490 million compared to $2,434 million in Q4 2023[27] - Diluted earnings per share rose by 40.0% to $0.07 from $0.05 in the previous quarter[27] - GAAP reported net income for the three months ended March 31, 2024, was $3,220 million, an increase from $2,373 million in the same period last year[33] - Excluding specific items, net income was $8,949 million for the three months ended March 31, 2024, compared to $8,796 million for the same period in 2023[33] - The diluted earnings per share attributable to Core Laboratories Inc. for the three months ended March 31, 2024, was $0.07, up from $0.05 in the same period last year[33] Segment Performance - Reservoir Description segment revenue was $84.2 million, flat sequentially and up 5% year-over-year, with operating margins of 14%[3] - Production Enhancement segment revenue was $45.4 million, up over 4% sequentially, with operating margins improving by 200 basis points to 8%[10] - Core anticipates Reservoir Description's second quarter 2024 revenue to continue growing, projecting revenue between $85.5 million and $88.5 million[18] Cash Flow and Capital Management - Free cash flow for the first quarter was $2.5 million, with cash from operations impacted by a $5.7 million increase in accounts receivable[11] - Free cash flow for the three months ended March 31, 2024, was $2,478 thousand, after capital expenditures of $3,052 thousand[37] - The company reduced debt by $3 million in the first quarter, bringing total debt to $163 million, maintaining a leverage ratio of 1.76[12] - Long-term debt decreased to $160,370 million from $163,134 million in the previous quarter, a reduction of 1.7%[29] - Capital expenditures for the quarter were $(3,052 million), up from $(2,208 million) in Q1 2023[30] Asset and Equity Changes - Total current assets increased by 2.6% to $229,047 million from $223,136 million in Q4 2023[29] - Total equity increased by 3.3% to $237,417 million compared to $229,807 million in the previous quarter[29] Tax and Other Expenses - The effective tax rate for the quarter was 32%, a significant decrease from 78% in the previous quarter[27] - The company incurred stock compensation expenses of $3,458 million for the three months ended March 31, 2024, compared to $6,515 million in the same period last year[33] - Foreign exchange losses for the three months ended March 31, 2024, were $285 million, compared to gains of $144 million in the same period last year[33] - The company reported severance costs of $824 million for the three months ended March 31, 2024[33] - The loss on lease abandonment and assets write-down was $1,809 million for the three months ended March 31, 2024, compared to $1,656 million in the same period last year[33] Return on Investment - Core's return on invested capital (ROIC) for the first quarter of 2024 was 11.6%, remaining relatively flat compared to the prior quarter-end[15] - Return on Invested Capital (ROIC) was reported at 11.6%, calculated from a net operating profit after tax (NOPAT) of $46.9 million and average total invested capital of $403.0 million[40]