Oilfield services provider Core Laboratories N.V. (CLB) reported better-than-expected first quarter 2010 results, driven by strong performance across the company’s business units. Earnings per share came in at $1.38, surpassing the Zacks Consensus Estimate of $1.35 and the year-ago profit of $1.26. Revenue was up 5.3% to $188.3 million
Reservoir Description Segment
Revenue for the Reservoir Description segment (which focuses on international crude oil related projects) was up slightly (by 1.5%) year over year to $104.1 million, as the company continued with its large-scale core analyses and reservoir fluids phase-behavior studies for deepwater fields offshore West Africa and eastern Brazil and also for the Middle East and Asia-Pacific regions. Consequently, the unit posted modestly higher operating income, which was up 1.3% to $25.1 million.
Production Enhancement Segment
Core’s Production Enhancement revenue increased approximately 9.1% year over year to $68.8 million, while segment operating income was up 14.3% to $20.9 million. The segment gained from unprecedented demand for its fracture diagnostics technologies. Concentrated in North America, the Production Enhancement unit also managed to grow the market share of its patented and proprietary line of perforating charges and gun systems in the region’s natural gas and oil shale reservoirs. Lastly, robust demand for HERO technology in the Middle East and Asia-Pacific perforating markets added to strong first quarter results.
Reservoir Management Segment
Revenue from Reservoir Management operations (also internationally focused) was up 16.2% year-over-year to $15.4 million, while the segment operating income increased by a healthy 61.6% to $5.6 million, mainly attributable to the mix of activity in the company’s consortium projects and the timing of analysis work on these projects.
Free Cash Flow & Balance Sheet
During the quarter, Core generated $56.2 million in free cash flow, an all-time quarterly high. Capital expenditures for the March quarter were $6.2 million. As of Mar 31, 2010, the company had $138.8 million in cash.
Proposed Stock Split
Core Labs Board has approved to split its shares on a 2:1 basis, pending shareholder approval.
Guidance
Management guided towards second quarter 2010 revenue of approximately $185 – $190 million, while earnings per share are likely to be between $1.39 and $1.44.
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