Core Laboratories (NYSE: CLB) reported Q2 EPS of $0.14, $0.04 better than the analyst estimate of $0.10. Revenue for the quarter came in at $115.7 million versus the consensus estimate of $115.35 million.

Industry and Core Lab Outlook:

Although crude-oil prices improved from the lows seen in May, E&P companies further reduced their 2020 capital expenditure plans, especially in the U.S., as witnessed by a steep decline in the frac spread index and an over 60% decline in completion activity. As the third quarter of 2020 began, U.S. land activity improved slightly from the lows experienced during the middle of the second quarter. In addition, travel restrictions and supply chain disruptions associated with COVID-19 continue to delay international project activity.

Core continues to project international activity to be down approximately 10 – 15% year-over-year. The pace and breadth of recovery from COVID-19 restrictions remains highly uncertain, making it difficult to forecast the level and timing of client activity. Therefore, Core is unable to provide meaningful quantitative quarterly guidance. From a qualitative perspective, the Company expects project work and international shipment of products to improve somewhat during the second half of 2020 from the lows experienced mid-second quarter 2020.

For Reservoir Description, we expect reservoir fluids analysis, which accounts for more than 65% of this segment's revenue, to be more resilient given this work is not solely tied to drilling and completion of new wells.

Production Enhancement has a wide range of innovative product offerings with on-going projects unrelated to drilling and completion, including a large international plug and abandonment and well remediation program. Production Enhancement should track or outperform future improvements in U.S. land completions.

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