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Core Laboratories (CLB): What's in Store for Q3 Earnings?

Core Laboratories NVCLB is set to report third-quarter 2015 results on Oct 21, after the closing bell. Last quarter, the company posted a positive earnings surprise of 5.13%. However, the company has a negative four-quarter average earnings surprise of 0.06%. Let's see what is in store this quarter.

Factors to Consider

Amsterdam, the Netherlands-based Core Laboratories is an oilfield services company that provides reservoir management and production enhancement services to the oil and gas industry globally. In short, oil field service players primarily support upstream companies that include drilling firms setting up their oil and gas wells.

It is common knowledge that the overall operation is positively correlated with oil price. This is because, the lower the price of the commodity, the fewer will be the incentives for the upstream players to explore and drill more wells and hence weaker will be the demand for oil field services firms.

During the third quarter, most of the times, crude traded below $50 per barrel. In fact, sometimes the commodity even traded below $40 per barrel. Overall, the pricing environment was not favorable for upstream operations and not supportive to oilfield service players.

Earnings Whispers

Our proven model does not conclusively show that Core Laboratories is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 83 cents per share.

Zacks Rank: Core Laboratories has a Zacks Rank #5 (Strong Sell), which dampens the probability of an earnings beat this season.

As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some companies in the energy sector that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Exterran Partners LP EXLP has Earnings ESP of +19.23% and a Zacks Rank #1 (Strong Buy). The company is expected to release earnings on Nov 3.

Matrix Service Company MTRX has Earnings ESP of +12.90% and a Zacks Rank #1. The company is likely to release earnings on Nov 4.

Natural Gas Services Group Inc. NGS has Earnings ESP of +21.05% and a Zacks Rank #1. The company is anticipated to release earnings on Nov 5.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CORE LABS NV (CLB): Free Stock Analysis Report

MATRIX SERVICE (MTRX): Free Stock Analysis Report

EXTERRAN PTNRS (EXLP): Free Stock Analysis Report

NATURAL GAS SVC (NGS): Free Stock Analysis Report

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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.


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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