Core Laboratories N.V.
) reported mixed third quarter 2012 results, highlighting robust
business unit results that were partially overshadowed by steep
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Quarterly earnings per share (EPS), excluding special items, came
in at $1.13, surpassing the Zacks Consensus Estimate of $1.10.
Compared year over year, EPS increased 13.0% from $1.00.
The company's consistent emphasis on enhancing its operations in
major oil-related and liquefied natural gas projects globally
complemented the results.
Total revenue for the quarter was $245.4 million, up 6.1% from
$231.3 million in the prior-year quarter on the back of strong
growth across all segments. However, the result missed the Zacks
Consensus Estimate of $247.0 million.
Reservoir Description Segment
Revenues at the Reservoir Description segment (which focuses on
international crude oil related projects) upped 3.6% year over
year to $124.2 million in the third quarter. Operating income for
the unit grew 27.8% year over year to $36.8 million, with the
operating margin coming in at 30%. The better segment results are
attributed to the company's increased activities in various
offshore field development projects across Brazil, Angola, Gabon,
Nigeria, and Ghana as well as the Middle East and Gulf of Mexico.
Capturing additional markets and use of superior quality
technologies also boosted the segment performance.
Production Enhancement Segment
Core Laboratories' Production Enhancement revenues leaped 3.6%
year over year to $100.9 million in the quarter while operating
income improved 1.9% year over year to $31.3 million. Operating
margin was an impressive 31%, buoyed by the greater market share
of the HTD-Blast perforating system and high demand for the
company's technical expertise.
Reservoir Management Segment
Quarterly revenues from Reservoir Management operations stood at
$20.4 million, up 44.9% year over year while operating income
moved up 72.2% year over year to $6.0 million. Operating margin
for the quarter was 30%. The primary catalysts for the segment
were high-quality study results that have attracted many industry
players. In Brazil, Core Labs, in collaboration with
Petroleo Brasileiro S.A.
), has undertaken a number of reservoir analysis ventures in
onshore and offshore plays of the country.
Balance Sheet, Free Cash Flow & Share
As of September 30, 2012, Core Laboratories had cash and cash
equivalents of $24.7 million. Capital expenditures for the third
quarter were $9.3 million. The company generated free cash flow
of $42.0 million.
On October 9, 2012, Core's board announced a cash dividend of 28
cents per share (amounting to an annualized payout of $1.12 per
share) on its common stock. The dividend will be paid on November
20, 2012 to shareholders of record as of October 19, 2012.
Amsterdam, Netherlands-based Core Labs provided a positive
outlook for 2013, reflecting favorable Brent crude pricing along
with the arrival of additional deepwater drilling rigs. These
will enable the company to walk into more new projects and
operate in other rich oil and gas acreages. Core Labs also plans
to bring in advanced technologies and added services aimed to pep
up the daily production and hydrocarbon recovery rates.
For the fourth quarter, Core Labs forecasts total revenue in the
$245 million to $250 million range. Earnings per share will
likely be between $1.10 and $1.17 per share.
Core Labs currently retains a Zacks #5 Rank, reflecting a Strong
Sell rating for a period of one to three months.