Core Labs (CLB) Cuts Quarterly Dividend, Revises Q4 Guidance
Zacks Investment Research | Jan 02, 2020 10:51PM ET
Most explorers and producers in the United States opted for conservative spending since they are mostly bothered about bottom-line growth — prompted by investors following years of dull returns — rather than just the surge in oil and gas production. Overall, curtailing investments in domestic upstream activities might affect rig demand. Hence, U.S. drillers may continue to lower the oil rig count in months ahead. This tough operating environment prompted oil service providers like Core Laboratories (NYSE:CLB) to prioritize financial discipline over high-octane growth.
As part of its efforts to decrease expenses, Core Labs recently cut its quarterly dividend and lowered fourth-quarter guidance. Following this move, the company’s shares declined 19%.
This Netherlands-based oilfield service company slashed its quarterly dividend payout by almost 55% from 55 cents per share to 24 cents (made effective from first-quarter 2020). Management stated that this strategic action was necessary in the light of its aim to boost the existing cash position. This move aimed at strengthening the company’s balance sheet will likely lower Core Labs’ annual dividend distribution by roughly $53 million.
The company’s Production Enhancement segment’s underperformance in the third quarter was primarily due to the reduction in U.S. land activity induced by lower U.S. onshore rig counts. Further, slower-than-expected progress in the large international and offshore projects affected the fourth-quarter 2019 financial results for Core’s Reservoir Description segment.
Core Laboratories N.V. Price
Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.