Core Labs Guides Lower for Q2 & '14, Shares Fall - Analyst Blog

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Oilfield service company, Core Laboratories N.V. ( CLB ) announced that it expects second quarter 2014 earnings per share (EPS) in the band of $1.32 to $1.35, lower than its previous projection of $1.48 to $1.53. The company also lowered its 2014 EPS guidance to $5.80 to $6.00 from $6.00 to $6.25. The news triggered an 11.7% share price fall in the NYSE.

Projected revenues were also lowered, with $265.0-$270.0 million now estimated for the second quarter instead of $280.0-$286.0 million and $1.10 billion forecasted for the full year rather than $1.16 to $1.18 billion.

Core Labs revealed that its clients in North America project lower-than-expected reservoir fluids levels from developed unconventional resources in Bakken, Marcellus, Niabrara, Montney and Eagle Ford formations. This compelled the company to lower its EPS and revenue guidance.

The Netherlands-based Core Labs provides reservoir management and production enhancement services to the oil and gas industry on a global basis. The company operates in over 50 countries and divides its operations in three principal business lines: Reservoir Description, Product Enhancement, and Reservoir Management.

Core Labs' deep portfolio of proprietary products and services positions it to operate successfully in the environment of low commodity prices and growing maturity in the global hydrocarbon reserve base. However, as Core Labs generates approximately 50% of its total revenue from international markets, the company is exposed to risks associated with doing business abroad.

As such Core Labs carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the same industry like Emerge Energy Services LP ( EMES ), Exterran Holdings Inc. ( EXH ) and Flotek Industries Inc. ( FTK ). All these stocks sport a Zacks Rank #1 (Strong Buy).

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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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