The Rising Influence of Rising Affluence

[DewDiligence]

CLB misses 1Q14 EPS guidance due to weather-related and miscellaneous items; lowers full-year 2014 guidance for revenue growth and EPS growth by 200 basis points:

http://www.sec.gov/Archives/edgar/data/1000229/000100022914000065/exhibit99-1_pressreleaseq1.htm

As was the case for all other oilfield service companies with operations in Northern America and Europe …results were weakened by severe weather-related disruptions. Specifically, Core believes first quarter 2014 EPS was reduced approximately 5%, or $0.07 per diluted share, because of transitory weather disruptions, slower than expected international activities, and delays of certain deepwater development projects.

After removing the effect of the weather disruptions and project delays, and excluding foreign exchange (ex-fx)… Core’s first quarter 2014 EPS increased 19% from year-earlier totals to $1.45. [I.e., excluding FX but not the weather-related and miscellaneous problems discussed in the first paragraph, 1Q14 non-GAAP EPS would have been $1.38, below the guidance range of $1.43-1.45 given in January (#msg-96549970).]

First quarter net income increased 10%, ex-fx, to $62,280,000, and operating income, ex-fx, increased 7% to $84,427,000. Year-over-year first quarter 2014 revenue increased 1% to $262,903,000, lower than expected due to the transitory weather impact and delays of certain deepwater development projects.

…Based on the anticipated increases in worldwide activity levels, Core believes that full-year 2014 revenue will range between approximately $1,155,000,000 and $1,175,000,000, up 8% year-over-year, with full-year EPS ranging from approximately $6.00 to approximately $6.25, up 15% year-over-year, when using first quarter EPS, ex-fx.

CLB’s prior full-year 2014 guidance had been for YoY revenue growth of ~10% and YoY EPS growth of ~17%, so the new full-year 2014 guidance for both revenue growth and EPS growth is 200 basis points lower than the old guidance.

At its 4pm closing price, CLB was within 3% of its all-time high, but it had sold off slightly this week, perhaps from a leak of the 1Q14 results. In AH trading, CLB is down about 2%, but I expect the sell-off tomorrow to be somewhat larger than that.

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