Core Viewpoint - Core Laboratories Inc. (CLB) has shown strong performance in the oilfield services sector, with a year-to-date share price increase of 13.9%, outperforming the broader oil and energy sector's growth of 8.2% [1][2] Financial Performance - The Zacks Consensus Estimate projects CLB's earnings per share to be 95 cents for 2024 and $1.33 for 2025, indicating year-over-year growth of 18.75% and 39.65% respectively [3][4] - In the second quarter of 2024, CLB reported an operating income of $16.4 million, a 10% sequential increase, and free cash flow of $14.3 million, while reducing net debt by $15.8 million [5][9] Revenue Growth - CLB's sales are projected to reach $531.72 million in 2024 and $573.88 million in 2025, reflecting year-over-year growth of 4.3% and 7.93% respectively [6][7] - Approximately 80% of CLB's revenues are generated from international markets, with the Reservoir Description segment's revenues growing 3.5% year-over-year in Q2 2024 [7] Market Trends - The company anticipates continued growth in international markets, driven by increased investments in oil fields and a projected rise in crude oil demand of 1-2 million barrels per day in 2024 and 2025 [6][7] Competitive Advantage - CLB is leveraging advanced technologies such as Dual Energy Computed Tomography and HERO-oriented FRAC technology to enhance production and optimize well productivity, providing a competitive edge [8] - The company's asset-light business model has resulted in a return on invested capital (ROIC) of 8%, allowing it to maintain profitability even during lower capital expenditure periods [10] Investment Consideration - Given the positive trends in financial performance, revenue growth, and competitive positioning, CLB stock presents an attractive entry point for investors, currently trading 20% lower than its 52-week high [11]

Core Viewpoint - OPEC's 'World Oil Outlook' presents a bullish forecast for oil demand, asserting that oil and gas will remain essential to global energy until 2050, suggesting a long-term buying opportunity for investors in the sector [1][2] Demand Growth in the Foreseeable Future - OPEC predicts global oil demand will rise from 102.2 million barrels per day (bpd) in 2023 to 120.1 million bpd by 2050, contrasting with the IEA's forecast of a peak at 105.6 million bpd by 2029 [2] Renewables and Energy Transition - OPEC acknowledges the growth of renewables but maintains that oil will still account for approximately 29.3% of the global energy mix by 2050, only slightly down from 30.9% today [3] Contrasting Supply Projections - OPEC anticipates $17.5 trillion in investment needed for oil production to meet future demand, with OPEC+ expected to control 52% of global production by 2050 [4] Emerging Markets: New Engine of Oil Growth - India is projected to contribute 8 million bpd to the expected demand increase by 2050, with non-OECD countries expected to offset declines in developed nations' oil consumption [6] The Road Ahead - OPEC's long-term outlook suggests that oil-focused stocks will remain attractive, particularly due to rising demand from emerging markets and consistent upstream investments [7] 3 Oil/Energy Stocks to Buy - Recommended stocks include Core Laboratories (valued at $5.2 billion), TechnipFMC (valued at $11.4 billion), and Tullow Oil (valued at $555.2 million), with significant projected earnings growth for each [8][9]

Group 1 - Core Laboratories (CLB) has shown a year-to-date return of approximately 3.6%, outperforming the average gain of 2.6% in the Oils-Energy sector [4] - The Zacks Consensus Estimate for CLB's full-year earnings has increased by 8.4% over the past quarter, indicating a positive trend in analyst sentiment [4] - Core Laboratories is ranked 2 (Buy) in the Zacks Rank system, which focuses on stocks with improving earnings outlooks [3] Group 2 - Core Laboratories is part of the Oil and Gas - Field Services industry, which has seen an average loss of 8.6% this year, highlighting CLB's relative strength in this area [6] - In contrast, Talen Energy Corporation (TLN), another stock in the Oils-Energy sector, has significantly outperformed with a year-to-date return of 167.2% and a Zacks Rank of 1 (Strong Buy) [5] - The Oils-Energy sector is ranked 16 in the Zacks Sector Rank, which includes 16 different groups [2]

Group 1 - Core Laboratories (CLB) has experienced significant selling pressure, resulting in a 10.1% decline in stock price over the past four weeks, but analysts expect better earnings than previously predicted [1] - The stock is currently in oversold territory, indicated by an RSI reading of 29.36, suggesting a potential reversal in trend [3] - Over the last 30 days, the consensus EPS estimate for CLB has increased by 9.2%, indicating a positive outlook for earnings and potential price appreciation [3] Group 2 - CLB holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [3]

Company Overview - Core Laboratories N.V. is an oilfield services company founded in 1936, based in Amsterdam, Netherlands, operating in over 50 countries [11] - The company provides reservoir management and production enhancement services to oil and gas companies, with operations in regions including the United States, Europe, Africa, Middle East, Asia Pacific, Canada, Russia, and Latin/South America [11] - Core Laboratories generated revenues of $509.8 million in 2023 [11] Investment Ratings - Core Laboratories holds a Zacks Rank of 2 (Buy) and has a VGM Score of A, indicating strong investment potential [12] - The company has a Value Style Score of B, supported by attractive valuation metrics such as a forward P/E ratio of 20.66, making it appealing to value investors [12] Earnings Estimates - For fiscal 2024, one analyst has revised their earnings estimate upwards in the last 60 days, with the Zacks Consensus Estimate increasing to $0.95 per share [12] - Core Laboratories has an average earnings surprise of 3.5%, suggesting a history of exceeding earnings expectations [12] Conclusion - With a solid Zacks Rank and top-tier Value and VGM Style Scores, Core Laboratories is recommended for investors' consideration [13]

Group 1 - Core Laboratories (CLB) is currently outperforming the Oils-Energy sector with a year-to-date return of approximately 6.4%, compared to the sector average of 5.5% [4] - The Zacks Rank for Core Laboratories is 2 (Buy), indicating a positive outlook based on earnings estimates and revisions, with a 4.5% increase in the consensus estimate for full-year earnings over the past three months [3] - Core Laboratories is part of the Oil and Gas - Field Services industry, which has an average year-to-date loss of 3.4%, further highlighting CLB's strong performance relative to its peers [6] Group 2 - The Oils-Energy group, which includes Core Laboratories, ranks 14 out of 16 in the Zacks Sector Rank, indicating a mid-tier performance among sector groups [2] - Ranger Energy (RNGR), another stock in the Oils-Energy sector, has significantly outperformed with a return of 22.4% since the beginning of the year and also holds a Zacks Rank of 2 (Buy) [4][5] - The Oil and Gas - Field Services industry consists of 24 individual stocks, with Core Laboratories and Ranger Energy being notable performers within this group [6][7]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ______________ Commission File Number: 001-41695 CORE LABORATORIES INC. (Exact name of registrant as specified in its charter) Delaware 98- ...

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].