The Rising Influence of Rising Affluence

[DewDiligence]

CLB lowers 4Q19 guidance—cuts dividend 55%:

https://www.sec.gov/Archives/edgar/data/1000229/000156459019047143/clb-ex991_6.htm

Core now projects that fourth quarter 2019 revenue will range from $154,000,000 to $156,000,000, with operating income of approximately $24,000,000 to $25,000,000, yielding operating margins of 16%. Earnings per share (“EPS”) for the fourth quarter of 2019 is expected to be $0.37 to $0.38.

The prior 4Q19 guidance (#msg-151880716) was revenue of $161-163M and EPS of $0.44-0.45, so the 4Q19 guidance cut amounts to 4% on revenue and 16% on EPS. The reason for the cut is this:

The decline in U.S. onshore activity has proven to be more pronounced than originally forecast in Core Lab’s third quarter earnings release on 23 October 2019. The U.S. rig count quarter-to-date is down approximately 11%, with U.S. completion activity tracking downward over 20%, primarily affecting Core’s Production Enhancement segment. In addition, client discussions required to advance large international and offshore projects have progressed slower than expected.

In other words, business is really bad.

CLB also issued preliminary 1Q20 guidance: revenue of $159-164M, and EPS of $0.39-0.41. I.e, 1Q20 is projected to be better than 4Q19, but not by much.

The new annualized dividend is $1.00, reduced from $2.20.

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