Core Laboratories Q3 Adj Profit Tops View, But Revenue Miss; Boosts 2014 Outlook

(RTTNews) - Oil and gas production management company Core Laboratories N.V. (CLB) reported Wednesday a profit for the third quarter that increased from last year, reflecting improved margins and revenue growth. Adjusted earnings per share topped analysts' expectations by a penny, while quarterly revenues missed their estimates. The company also raised its earnings and revenue forecast for the fourth quarter.

Core noted that this was the most profitable quarter ever in the company's history, driven by new technology, with all-time highs for earnings per share and net income.

The company noted that record results were driven primarily by new, or recently introduced, technology and related services by Core's reservoir description and production enhancement operations, in addition to reservoir management operations' most profitable third quarter ever.

The Amsterdam, Netherlands-based service provider for oil companies reported net income of $66.50 million or $1.50 per share for the third quarter, higher than $61.90 million or $1.35 per share in the prior-year quarter.

Excluding foreign exchange losses, pro-forma net income for the latest quarter was $67.93 million or $1.53 per share.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $1.52 per share for the quarter. Analysts' estimates typically exclude one-time items.

Total revenues for the quarter edged up 1 percent to $276.14 million from $273.16 million in the same quarter last year, and missed eight Wall Street analysts' consensus estimate of $284.85 million.

Segment-wise, revenues from reservoir description operations edged down to $131.38 million last year, while production enhancement operations revenue grew 3 percent to $122.16 million from last year. Revenues from the reservoir management operations edged up to $22.59 million from the prior-year quarter.

Operating income grew to $89.12 million from $84.60 million in the year-ago quarter. Adjusted operating margins expanded 170 basis points to an all-time quarterly record of 33 percent, even though revenue growth was lower than expected.

The company noted that the results reflect Core's growth strategies of adding new technologies and services, while continuing to focus on characterizing reservoir quality for emerging unconventional resource plays in North America and initiating enhanced oil recovery projects for maturing unconventional plays. As expected, Core also received several deepwater projects from the Gulf of Mexico during the quarter, boosting operating and incremental margins.

Looking ahead to the fourth quarter, Core now expects earnings in a range of $1.53 to $1.56 per share on revenues between $275.0 million and $280.0 million, higher than the prior forecast for earnings in the range of $1.56 and $1.61 per share on revenues between $285.0 million and $295.0 million.

Analysts expect the company to report earnings of $1.60 per share on quarterly revenues of $292.84 million.

CLB closed Wednesday's regular trading session at $140.09, down $5.84 or 4.00% on a volume of 0.78 million shares. The stock lost a further $11.09 or 7.92% in after-hours trading.