Oilfield service company,
Core Laboratories N.V.
) reported record second-quarter 2014 adjusted earnings per share
(EPS) of $1.35, in line with the Zacks Consensus Estimate but
higher than the year-ago quarter figure of $1.32 per share.
Total quarterly revenue of $267.6 million - a record second-quarter
result for Core Laboratories - was about 1.7% higher than the
prior-year quarter level. Higher revenues from all its business
segments led to the improvement. However, the top line failed to
meet the Zacks Consensus Estimate of $279.0 million.
Segment revenues were $130.6 million, compared with $129.2 million
in second-quarter 2013. The flattish results reflect the effect of
comparatively lower revenues from high-margin projects as well as
international and deepwater associated sales.
Operating income (excluding foreign exchange losses) for the
unit fell 5.5% year over year to $35.6 million. Operating margin
for the quarter was 27%.
Segment revenues were approximately $111.0 million in the reported
quarter against $110.2 million in second-quarter 2013. The segment
failed to see any substantial revenue growth as improvement in the
North American market was offset by declining sales from Latin
Operating income (excluding foreign exchange losses) fell 1.6%
year over year to $37.4 million. Operating margin for the quarter
Segment revenues of about $26.0 million were up 9.5% year over
year. An increase in Core Laboratories' project portfolio was the
main catalyst for the improvement.
Operating income (excluding foreign exchange losses) increased
25.6% year over year to $9.6 million. Operating margin for the
quarter was 37%.
Balance Sheet & Free Cash Flow
As of Jun 30, 2014, Core Laboratories had cash and cash equivalents
of $29.6 million. Capital expenditures for the first quarter were
$12.1 million. The company generated free cash flow of almost $53.5
Quarterly Dividend & Share Repurchase
On Jul 8, 2014, Core Labs' board of directors declared its
quarterly cash dividend of 50 cents per share ($2.00 per share
annualized). The new dividend will be paid on Aug 18, to
shareholders of record as of Jul 18.
During the reported quarter, the company bought back 455,000
shares, reducing its outstanding diluted share count to 44,707,000,
a 16-year low for the company.
For the third quarter, the company expects EPS to increase about
11% sequentially and be in the $1.49-$1.52 range. Core
Laboratories expects third-quarter revenues to range from $280.0 to
For fourth quarter 2014, Core Labs expects EPS in the $1.56 to
$1.61 range and revenues between $285.0 million and $295.0
Core Laboratories foresees higher North American activity, more
deepwater coring programs and a strong demand for high-pressure,
high-temperature reservoir fluid phase behavior projects, all of
which should lead to the growth. In the international market, Core
Laboratories anticipates modest growth in the remainder of the
year, based on favorable Brent
Zacks Rank & Other Stock Picks
Currently, Core Laboratories holds a Zacks Rank #4 (Sell).
Meanwhile, one can consider better-ranked players from the same
industry such as
Flotek Industries Inc.
), all of which sport a Zacks Rank #1 (Strong Buy).
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