Dahlman Rose Comments On Core Laboratories Following Recent Earnings Report

Core Laboratories CLB reported earnings of $0.77 per share, matching our $0.77 EPS estimate and above the consensus of $0.75. In the press release the company guided earnings for 2011 to a $3.55-$3.60 per share range, compared to Dahlman Rose's $3.76 per share estimate and a consensus of $3.61. Dahlman's initial reaction is that the quarter is solid and that the guidance is conservative as it incorporates a flat rig count in North America where it look for an increasing one. Overall revenue of $206.7MM compared with our forecast of $198.3MM. The outperformance was led by the reservoir description and reservoir management groups. Operating income of $56.5MM was slightly below our $57.6MM forecast owing to a shortfall in the production enhancement segment largely offset by better results in the other two segments. Production enhancement revenues of $82.1MM trailed our $84.2MM estimate and margins fell to 28.4% versus Dahlman's 32.3% forecast. This was somewhat surprising due to the relative strength in North American drilling and probably reflects a greater impact from weather- related delays and a less aggressive posture towards expansion in the US market. Dahlman Rose has a Hold rating on CLB CLB closed Tuesday at $97.27