Core Laboratories (CLB) Tops Q1 EPS by 2c

Core Laboratories (NYSE: CLB) reported Q1 EPS of $0.15, $0.02 better than the analyst estimate of $0.13. Revenue for the quarter came in at $108.4 million versus the consensus estimate of $110.7 million.

Industry and Core Lab Outlook:

For 2021, Core will continue to execute its strategic plan with a focus on generating free cash flow and reducing net debt, while maximizing ROIC. Additionally, as part of Core's 2021 strategic focus, the Company will continue to invest in targeted, client-driven technologies that aim to both solve problems and capitalize on Core's growth opportunities. The Company remains well-positioned, with ample liquidity to invest in its global capabilities, to meet the needs of its clients. These capabilities include Core's expanding proprietary databases, along with innovations in artificial intelligence and machine learning, which are the foundation of Core's digital technology transformation.

Core is optimistic about its international growth opportunities throughout the remainder of 2021 as crude oil markets rebound. With Core Lab having more than 70% of its revenue exposed to international activity, the Company remains active on international projects already underway. Core sees momentum building in the international market, which will drive growth opportunities for the Company throughout the remainder of 2021 and beyond; some of these geographic areas include: Turkey, the South Atlantic Margin, Mexico, Qatar and various other areas of the Middle East. While unpredictable disruptions related to COVID-19 are expected to persist in the near to mid-term, Core remains optimistic there will be gradual improvement over the remainder of 2021. Considering the continuing improvement in international activity, Core projects Reservoir Description revenue to be up mid to high single digits, sequentially, for the second quarter of 2021.

Core also expects sequential improvement in U.S. land activity, based in part on a strong recovery in the U.S. frac spread following the winter storm; this positive trend continued into April 2021. As a result, Core Lab projects Production Enhancement revenue to grow by mid to high teens, sequentially, in the second quarter of 2021. Core expects Production Enhancement to continue to track or outperform U.S. land activity levels.

In summary, excluding near-term international challenges related to travel restrictions, Core Lab sees activity levels and financial performance improving throughout the remainder of 2021. Core's growth opportunities are directly related to existing long-term projects returning to normal workflows, as well as expanding client activity and new market penetration, particularly internationally.

The Company's second quarter 2021 guidance is based on projections for underlying operations and excludes gains and losses in foreign exchange. Second quarter 2021 guidance also assumes an effective tax rate of 20%. After fully executing the ATM program, the Company's ordinary share count outstanding was 46,240,481 as of 1 April 2021.

For earnings history and earnings-related data on Core Laboratories (CLB) click here.

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