Core Laboratories' Q3 Earnings and Sales Beat Estimates

Core Points - Core Laboratories Inc. (CLB) reported third-quarter 2024 adjusted earnings of 25 cents per share, exceeding the Zacks Consensus Estimate of 21 cents and up from 22 cents in the same quarter last year, driven by strong performance in the Reservoir Description and Production Enhancement segments [1] - The company's operating revenues reached $134.4 million, surpassing the Zacks Consensus Estimate of $133 million by 1.1% and reflecting a 7.5% increase from $125 million in the prior year [1] - As of September 30, 2024, Core Laboratories' net debt was $120.5 million, a decrease of $11.8 million during the quarter, with an improved leverage ratio of 1.47 compared to 1.66 in the previous quarter [1] Segment Performance - Reservoir Description segment revenues increased by 3.5% to $88.8 million from $85.1 million in Q3 2023, exceeding projections of $88 million, with operating income rising from $13 million to $16.5 million [2] - Production Enhancement segment revenues grew by 13.4% to $45.6 million from $40.2 million year-over-year, slightly beating estimates of $45.2 million, although operating income of $3.2 million fell short of the projected $4.4 million [2] Financials and Dividends - As of September 30, 2024, Core Laboratories had cash and cash equivalents of $21.5 million and long-term debt of $139.9 million, with a debt-to-capitalization ratio of 35.3% [3] - The company reported operating cash of $13 million and capital expenditures of $3 million, resulting in a positive free cash flow of $10 million [3] - A cash dividend of $0.01 per share was approved, payable on November 25, 2024, to shareholders of record as of November 4 [3] Outlook - For Q4 2024, Core Laboratories expects revenues between $128.5 million and $135.5 million, with operating income projected between $14.8 million and $17.7 million, and earnings per share anticipated to be between 20 cents and 25 cents [4] - The company forecasts Reservoir Description segment revenues to be between $87.5 million and $90.5 million, while Production Enhancement segment revenues are expected to range from $41 million to $45 million [4] - Core Laboratories anticipates a 20% effective tax rate for Q4 and aims to maintain positive free cash flow in upcoming quarters [4] Market Outlook - The company expects a multi-year recovery in the international market, driven by underinvestment and rising crude oil demand, projecting an increase of 1-1.6 million barrels per day in 2025 [5] - Short-term volatility in crude oil markets is anticipated due to global economic and geopolitical uncertainties, but long-term projects in various regions are expected to boost demand for Core Lab's services [5] - U.S. land activity is projected to decline in Q4 2024 but return to similar levels year-over-year in 2025, with challenges including recent consolidations and low natural gas prices [6]