Core Laboratories (CLB) Q1 Earnings: Will It Disappoint?
Zacks Investment Research | Apr 17, 2017 10:29PM ET
Oilfield services company Core Laboratories N.V. (NYSE:CLB) is set to report first-quarter 2017 results after the closing bell on Apr 19.
In the preceding quarter, this Amsterdam, Netherlands-based company’s earnings were in line with the Zacks Consensus Estimate. In fact, Core Laboratories’ earnings met estimates in each of the last four quarters.
Let’s see how things are shaping up for this announcement.
Factors at Play
Core Laboratories is an oilfield services company that provides reservoir management and production enhancement services to the global oil and gas industry.
The OPEC production cut in Nov 2016 has been a boon for energy firms. Increasing drilling activities and rig counts has been reflected in the price performance of the company.
However, during the first quarter, the commodity prices have declined, with crude oil reaching $47.01 per barrel in March. Even if commodity prices improve, the structural oversupply and pricing pressure will weigh on the sector components’ operating margins.
The company witnessed a rebound in the onshore U.S. markets due to a pick up in the shale drilling. However, Core Laboratories' exposure to international markets, where rig counts are still under pressure, remains a major concern. It is expected that positive results from the increasing activities in North America will offset weakness in the international markets. Meanwhile, higher taxes due to increased earnings could hinder growth.
Lack of new deepwater drilling orders has already begun to pose concerns to the subsea part of the industry. As the deepwater is not expected to rebound till next year, it could hinder the progress of the Core Laboratories in the near term.
Core Laboratories N.V. Price and Consensus
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