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Core Laboratories (CLB) Q4 Earnings Analysis Core Laboratories (CLB) Q4 Earnings Unearthed!

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Core Laboratories (CLB) unearthed its fourth-quarter 2023 adjusted earnings of 19 cents per share, falling short of the Zacks Consensus Estimate of 20 cents. The bottom line also descended from the year-ago quarter’s figure of 20 cents due to the underwhelming performance in the Production Enhancement segment.

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

Segmental Breakdown

Reservoir Description: Revenues in this segment surged approximately 8.3% to $84.6 million from $78.1 million in the prior-year quarter, surpassing our projection of $84.3 million. Operating income also witnessed an upturn from $6.8 million in the year-ago period to $12.3 million, spurred by increased demand for reservoir rock and fluid analysis in international markets.

Production Enhancement

Conversely, this segment’s revenues dwindled 11.6% to $43.6 million from $49.3 million in the prior-year quarter, slightly trailing our estimate of $43.7 million. Operating income of $2.2 million fell short of our projection of $3.5 million, reflecting a downturn from the year-ago quarter’s level of $7.9 million due to reduced U.S. onshore well completion activity.

Financial Performance

As of December 31, 2023, Core Labs boasted cash and cash equivalents amounting to $15.1 million with long-term debt of $163.1 million, resulting in a debt-to-capitalization ratio of 41.1%.

In the reported quarter, CLB generated $19.4 million of operating cash, while its capital expenditure totaled $2.7 million.

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

Outlook and Zacks Rank

Looking ahead to the first quarter of 2024, revenues are expected to be within the range of $122-$128 million, with operating income estimated in the band of $11.8-$14.3 million. Relative to earnings per share, the company foresees a range of 14 cents to 18 cents.

Reservoir Description revenues for the first quarter are projected to reach between $80-$84 million, with an operating income of $10.1-$11.9 million. In the realm of Production Enhancement, revenues are anticipated to hover around $42-$44 million during the same time frame, with an operating income of $1.5-$2.2 million.

As for the Zacks Rank, Core Labs currently holds a Zacks Rank #3 (Hold).

Considering the energy sector, investors might be inclined to explore some better-ranked stocks like Subsea 7 S.A. SUBCY and Oceaneering International, Inc. OII, both boasting a Zacks Rank #1 (Strong Buy), as well as Enbridge Inc. (ENB) with a Zacks Rank #2 (Buy) at present. Subsea 7, valued at $4.13 billion, currently offers a dividend of 38 cents per share, equating to 2.81% on an annual basis. The company specializes in offshore project services for the energy industry, particularly in subsea field development.

Oceaneering International is worth $2.15 billion, with its shares having retreated 2.7% over the past year. The company provides engineered services and products, as well as robotic solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment industries globally.

Lastly, Enbridge is valued at $76.48 billion and currently offers a dividend of $2.6 per share, standing at 7.22% on an annual basis. The company and its subsidiaries operate as an energy infrastructure company with five segments, including Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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