The Rising Influence of Rising Affluence

[DewDiligence]

CLB—Crunching the 2Q14 and full-year numbers:

CLB’s 2Q14 non-GAAP* EPS of $1.35 and revenue of $267.6M met the (twice-lowered) guidance (#msg-101873399) with EPS at the top of the guidance range and revenue in the middle of the guidance range. Still, the shares sold off 10% on Thursday because CLB’s new EPS guidance for the rest of 2014 fell short of the prior guidance given on 5/12/14, as detailed below.

Full-year revenue guidance: CLB expects 3Q14 revenue of $280-290M and 4Q14 revenue of $285-295M; adding in the $530.5M of revenue reported during 1H14, full-year revenue guidance is $1.10-1.12B, which is substantially unchanged from the prior guidance of $1.1B given on 5/12/14 (#msg-101873399).

Full-year EPS guidance: CLB expects 3Q14 EPS of $1.49-1.52 and 4Q14 EPS of $1.56-1.61; adding in the $2.73 of EPS reported during 1H14, full-year non-GAP EPS guidance is $5.78-5.86, well below the prior guidance of $5.80-6.00 given on 5/12/14 (#msg-101873399).

Despite the lowered full-year EPS guidance, I thought the 10% sell-off (on top of the two big sell-offs during April and may) was somewhat overdone, and hence I added shares (#msg-104654781).

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CLB’s 2Q14 PR:
http://finance.yahoo.com/news/clb-q2-2014-core-lab-212100609.html

*2Q14 GAAP EPS was $1.43, $0.08 higher than non-GAAP EPS due to the favorable effects of currency. CLB excludes currency from non-GAAP EPS, but otherwise reports non-GAAP EPS that is consistent with GAAP; thus, unless otherwise specified, “EPS” refers to non-GAAP EPS throughout this post.